Smartphone Wars

None.Technology and Industry

Irrational Expectations: Can a Regulator Credibly Commit to Removing an Unbundling Obligation?

There is a large empirical literature that investigates the effects of unbundling requirements on broadband operators' incentives to invest in infrastructure. To date, that literature has generally relied on industry-wide data as an indicator of how the representative operator reacts to the imposition of mandatory unbundling. In this paper, we present original findings on how specific firms reacted to the removal of an unbundling obligation that is, an act of "regulatory forbearance"either for an existing access technology or for a new access technology. We rely on three case studies to evaluate the impact of regulatory forbearance on specific incumbents and entrants that were directly affected by the regulator's decision. Our findings from the first case study appear to undermine the so-called "stepping stone" justification for unbundling an existing access technology (for example, the copper loop). In particular, there is a large discontinuity in the investment by entrants around the date of forbearance, in contrast to the steady movement up the ladder of investment predicted by the stepping stone hypothesis. Such a discontinuity suggests that either (1) the regulator failed to signal its deregulatory intentions to entrants, or (2) that the signal was clear but the entrant did not react according to the theory. We also find that incumbent investment increases significantly in response to forbearance from regulating a new access technology (for example, fiber loops). When forbearing from regulating an existing access technology, regulators can signal their future intentions to entrants by slowly increasing the regulated wholesale rate. In the case of forbearing from regulating a new technology, however, there is no equivalent mechanism by which regulators can signal their deregulatory intentions to incumbents. Because a regulator cannot credibly signal its commitment to industry participants, and because such a commitment is critical to the practical success of the stepping stone theory, the best policy for maximizing investment is to accelerate the date of forbearance for existing and new access technologies.Technology and Industry

The Need for Greater Price Transparency in the Medical Device Industry: An Economic Analysis

Proposed legislation seeks to impose price transparency in the health care industry as a remedy for increasing medical device prices. This paper analyzes previous attempts to mandate similar price-disclosure rules in a variety of industries. We identify the economic conditions under which mandatory price disclosure is likely to generate substantial benefits and costs. Applying these conditions, we conclude that mandatory price disclosure for implantable devices is unlikely to pass a benefit-cost test.

Accuracy Assessment of the 2006 National Land Cover Database Percent Impervious Dataset

An impervious surface is any surface that prevents water from infiltrating the ground. As impervious surface area increases within watersheds, stream networks and water quality are negatively impacted. The Multi-Resolution Land Characteristic Consortium developed a percent impervious dataset using Landsat imagery as part of the 2006 National Land Cover Database. This percent impervious dataset estimates imperviousness for each 30-meter cell in the land cover database. The percent impervious dataset permits study of impervious surfaces, can be used to identify impacted or critical areas, and allows for development of impact mitigation plans; however, the accuracy of this dataset is unknown. To determine the accuracy of the 2006 percent impervious dataset, reference data were digitized from one-foot digital aerial imagery for three study areas in Arkansas, USA. Digitized reference data were compared to percent impervious dataset estimates of imperviousness at multiple 900m2 , 8,100m2 , and 22,500m2 sample grids to determine if accuracy varied by ground area. Analyses showed percent impervious estimates and digitized reference data differ modestly; however, as ground area increases, percent impervious estimates and reference data match more closely. These findings suggest that the percent impervious dataset is useful for planning purposes for ground areas of at least 2.25ha

Why the iPhone Won't Last Forever and What the Government Should Do to Promote its Successor

Because of the overwhelming, positive response to the iPhone as compared to other smart phones, exclusive agreements between handset makers and wireless carriers have come under increasing scrutiny by regulators and lawmakers. In this paper, we document the myriad revolutions that have occurred in the mobile handset market over the past twenty years. Although casual observers have often claimed that a particular innovation was here to stay, they commonly are proven wrong by unforeseen developments in this fast-changing marketplace. We argue that exclusive agreements can play an important role in helping to ensure that another must-have device will soon come along that will supplant the iPhone, and generate large benefits for consumers. These agreements, which encourage risk taking, increase choice, and frequently lower prices, should be applauded by the government. In contrast, government regulation that would require forced sharing of a successful break-through technology is likely to stifle innovation and hurt consumer welfare.