Anticompetitive Price Squeezes in the Telecommunications Industry: A Common Complaint about Common Facilities
30 May 2007
By Dr. William Taylor with former NERA Vice President Dr. Timothy Tardiff
Allegations of price squeezes have a familiar ring because the underlying theory of competitive harm combines elements of several well-known theories of exclusionary conduct, such as predatory pricing, refusals to deal, vertical foreclosure, and denials of access to essential facilities. In both the United States and Europe, price squeezes are the subject of much controversy in the telecommunications sector and other regulated industries, where access to common facilities is a frequently contested issue.
In this chapter from Economics of Antitrust: Complex Issues In a Dynamic Economy, NERA Special Consultant Dr. William Taylor and former Vice President Dr. Timothy Tardiff discuss the economic and public policy issues that encompass analyses of price squeezes. The authors point out that an assessment of the competitive effects must account for the regulatory rules and competitive dynamics that affect the pricing of the common facility at issue. This is particularly true in the telecommunications industry after the Telecommunications Act of 1996.
