The past year in economics at the Federal Communications Commission covered a broad range of topics in telecommunications policy. This paper highlights the economic issues that are addressed in the following key areas: spectrum management, universal service and intercarrier compensation reform,...

This paper analyzes the welfare effects of monopoly differential pricing in the important but largely neglected case where marginal costs of service differ across consumer groups. Compared to uniform pricing, cost-based differential pricing generally raises total welfare. Although total output...

An input supplier selling to competing downstream firms would benefit from publicly committing at the outset to all contracts. Efficient commitment, however, would require complete contracts. The authors study instead bilateral contracting, without commitment regarding others' terms. Each firm...

Arrow (1962) showed that a secure monopolist (unconcerned with preemption) has a weaker incentive than would a competitive firm to invest in a patentable process innovation. This paper shows that the ranking can be reversed for product innovations. Only the innovator sells the new product, a...