chapter  2
34 Pages

Pricing Strategies and Regulatory Effects in the U.S. Cellular Telecommunications Duopolies

ByL. Keta Ruiz

Cellular telecommunication in the Dnited States is a case of duopoly with no entry as defined by the Federal Communications Commission (FCC). Each player in each market uses a portion of radio spectrum to produce cellular telecommunication services. Scarcity and rivalry of radio spectrum is the main reason why the FCC gran ted only two licenses for cellular operation at each market. The main characteristics ofthis industry are defined later and are summarized as folIows: (a) cellular telecommunication has no close substitutes and is a nearly homogeneous service in each market and nationwide; (b) some players meet as competitors in several markets; and (c) cellular services are regulated in some states, whereas in others they are not. These characteristics compelled me to make a theoretical and empirical assessment of this young industry, which started in 1982.