Local Telephones Long Distance Telephones Cable Radio & TV Internet Wireless

Reasonable and nondiscriminatory rates Limited liability.

FCC, Utilities Commissions, Local Franchise Boards

1876 1878 1889 1894

Telephone patented Exchanges Automated Exchanges Main AT&T Patents expire; rates fall 50% by 1907 1902 1002 cities had service; 451 had at least two providers 1900s Bell Labs created; company patents improvements; company develops long distance; competitors decline

Telephones become common carriers but not of each other. States introduce regulation 1913 Consent decree: telegraph, local service, long distance separate monopolies 1920s Bell Labs wins Nobel Prize 1934 FCC created 1947 Bell Labs invents transistor & wins second Nobel Prize 1949 First government antitrust suit 1956 First antitrust suit ends: AT&T blocked from competing outside telephony. 1950s Snapshot: Ma Bell 1910

1960s Bell Labs discovers cosmic microwave background, wins third Nobel Prize 1960s Competitors fight AT&T on right to compete on equipment, long distance 1974 Second government antitrust suit 1984 Breakup; competition in long distance and equipment; Baby Bells. 1996 Telecommunications Act introduces Local Competition

1940s 1950s 1960s

1972

1970s

1977-79

1980

Local service for rural areas FCC regulates cable to carry local stations, protect UHF, prevent siphoning, and fund public service programs Consensus Agreement liberalizes restrictions while micromanaging what cable stations can do. Consensus Agreement becomes unmanageable Court challenges erode FCCs ability to require cable to carry local signals, prevent siphoning. Deregulation

1984

Cable Communications Policy Act lets FCC waive rate regulation where effective competition exists. Local government cannot grant exclusive licenses. Open access: Must carry content from competitors on common carrier basis.

1992

Cable TV Consumer Protection & Competition Act lets local authorities set prices for basic service in most cases. Act ends state regulation of nonbasic service. Local governments cannot charge exorbitant fees.

States Cannot Demand Open Access of Broadband FCC is studying the issue.

Telephones Wireless Cable

Satellite

Hedy Lamarr (1913-2000)

Any girl can be glamorous. All you have to do is stand still and look stupid.
Hedy Lamarr (1913-2000)

Wires vs. Broadcast Radio, Cellular, & Time Division Multiplexing

Frequency Hopping Smart Transmitters

Picking Winners
-- Orphaned Users -- Reaching Equilibrium Efficiently - Duplicated Development - Fragmented/Technically Inferior Winners

Picking Winners, ctd.

-- Network Effects -- Choosing Wrong -- Antitrust Dangers

First Generation
FCC Regulation Advanced Mobile Phone Standard (AMPS)

Second Generation
GSM, DAMPS/TDMA Qualcomm CDMA

Third Generation
CDMA 2000 and

W-CDMA

First Generation:
National Bodies National Systems:

TACS (UK), RC-2000 (France), Netz B (Germany), RTMS (Italy), NMT-450 (everywhere else).

Second Generation:
European Telecommunications Standards Institute (ETSI) Standard for Mobile (GSM).

GSM Conquers The World !!!

105 countries
Not Western Hemisphere 60% of Worldwide sales.

Third Generation:

W-CDMA
Backward Compatible to GSM Incompatible With Qualcomm CDMA Less Capacity, More Interference!

Third Generation:
QualComm/Ericcson Treaty Standards vs. Patents

Ericcson Buys QualComms Hardware Business

Third Generation:
QualComm/Ericcson Treaty Wasteful Patents

Are Cross-Licenses Good for Consumers?

Third Generation: CDMA2000 vs. W-CDMA: China

Korea
Japan

Is it a Small World (After All)?

Antitrust Policy:
- Schumpeterian Competition - Innovation Cycle vs. Court Dockets - Innovation Cycle vs. Tipping Time