BMGT 798V
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Professor Joseph P. Bailey 3411 Van Munching Hall Robert H. Smith School of Business University of Maryland jbailey@rhsmith.umd.edu phone: 301-405-2174 office hours: 1 hour before and 1 hour after class |
Course Information
Course DescriptionThis course covers topics in telecommunications, economics, and public policy. It is intended for MBA students who have a particular interest in telecommunications, electronic commerce, and information technology. The course describes how converging industries requires telecommunications policy to be understood within the context of broader technology policy. The dramatic change in the market due to the introduction of the Internet is a recurring theme in this class. Therefore, the core concepts of economics and regulation of telecommunications is developed within the framework of converging technologies and industries.Starting with basic economic concepts and incentives, this course examines the structure of the telecommunications and related technology industries, the role of regulation, and its impact on cost allocation and price setting. The use of managerial economics gives us insight into the issues of individual actors in the telecommunications and technology markets. Industrial organization theory helps us address the issues of industry boundaries, competitive advantage, and antitrust policy. This course will use an integrated approach of managerial economics and industrial organization theory applied to the interesting and complex environment of telecommunications and technology policy.
Required TextsThere are two texts for the class:
Optional TextsYou may want to suppliment the course reader with one or more of the following books depending upon the topics you are most interested in. For those interested in general economic texts, you may want to refer to:
Course RequirementsThe course has four grading elements: a technology briefing, a final presentation/paper, a final exam, and class participation. The final presentation/paper is on a topic of the student's choosing, but it must be approved by the instructor. Students will be asked to propose a topic of their choosing around the mid-point of the semester. The final exam will address the cumulative material of the course and will test students' thinking an integration of ideas. Finally, class participation is an important aspect of the class. Students can help their class participation grade by regularly attending class, preparing for class, and participating in class discussions.
Course FeedbackI welcome any feedback from students throughout the semester regarding course content and the presentation of material. Please feel free to send me email or use the following form to send me feedback anonymously. |
Course Schedule
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January 28, 1999 |
Structure of the Telecommunications Industry[Bailey and Lars Davies, Ashurst Morris Crisp]DescriptionIn this introductory class, we will discuss the outline for the course, introduce ourselves to each other and discuss the course requirements. After the administrative tasks, we will then describe the existing telecommunications industry by describing the monopoly, oligopoly, semi-competitive, and competitive telecommunication markets. An introduction to LECs (Local Exchange Carriers), IXCs (Interexchange Carriers), and CAPs (Competitive Access Providers) explains the different forms of competition (or lack thereof) in the different marekts. We will discuss how firms can position themselves differently than their competitor to achieve a competitive advantage in telecommunications
Readings
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February 4, 1999 |
Telecommunications History and Law[Bailey]DescriptionThis class discusses the different modes of communication including broadcasting, publishing, and common carriers. We discuss some of the leagal constructs for these different modes of communication and some of its history. This eventually leads to some of the most recent telecommunication policies including the Telecommunication Act of 1996. With the introduction of regulation, there are changes in the price and quality of telecommunications service offerings. The limitations of such regulation are discussed. Included in this discussion is an investigation of the concept of Universal Service.
Readings
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February 11, 1999 |
Telecommunications Liberalization and Privatization[Bailey]DescriptionThe movement of the telecommunications industry from publicly owned or regulated companies to competitive firms is described within the process of liberalization and privatization. For example, we discuss the World Trade Organization agreement to introduce competition in the global telecommunications market. Much of this movement includes an investigation of emerging economies and the role of price regulation. Therefore, we will discuss how regulators may choose to set prices of regulated telecommunication companies (e.g. rate-of-return or price caps). In this class we will go into depth with the incentives for incumbents and entrants in the telecommunication markets.
Readings
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February 18, 1999 |
Technology and Competition in the Local Loop[Student Presentations & Bailey]DescriptionThis class will focus on new technology in the local loop. The local loop is seen as perhaps the greatest bottleneck in the development of new broadband services to the home. In this class, we will discuss the potential for new local loop technologies including wireline (ADSL, cable modems) and wireless (LMDS).
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February 25, 1999 |
Interconnection, Competition, and Global Networks[Stu Mathison, Broadreach Associates International, and Bailey]DescriptionThe points where one network meets another are seen as an interface between two or more companies. Interconnection agreements shape technology development and the incentives of users and telecommunication companies to design and use their network differently. We will discuss network externalities, the role of regulating interconnection points, and the use of "call-back" in markets.The class also addresses the ability for international partnerships to be formed among telecommunication carriers and how the alliance structures affect service offerings. The extremes of alliances include outright ownership of partners such as the SBC purchase of PacBell and proposed purchase of Ameritech. Other relationships, such as the World Partners alliance, require no equity.
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March 4, 1999 |
Internet Economics - Internet Design & Governance[Bailey and Amitava Dutta, George Mason University.]DescriptionThe question of why regulation exists in the telecommunications industry is introduced starting with the core economic concept of a natural monopoly. Issues such as what constitutes a common carrier are addressed. The class ends with a discussion of network externalities and how network externalities change the value of telecommunications services.
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March 11, 1999 |
Internet Economics - Internet Pricing[John Schnizlein, Cisco.]DescriptionThe introduction of the Internet into the telecommunications service offerings is dramatically changing the nature of the market. Unlike traditional telecommunications offerings, there is much more heterogeneity in the Internet market. However, the Internet is still dependent upon telecommunications services. How telecommunication regulation affects the Internet market and how Internet regulation is developed is discussed along with the core concepts about the economics of the Internet.
Readings
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March 18, 1999 |
Convergence of Communication, Computing, and Content[Bailey and YT Chien, Harvard and National Science Foundation]DescriptionThis class will address the converging inudstries in communications, computing, and content. We will explore the Microsoft antitrust case and a historical assessment of the AT&T divestiture and IBM antitrust case.Readings
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March 25, 1999 |
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April 1, 1999 |
Government Funding and Technology Development[Dean Howard Frank, Robert H. Smith School of Business, University of Maryland]DescriptionThe creation of technology and industrial policy by governments is very diverse. In some industries in some countries, governments form outright partnerships with industry to develop telecommunications and technology services. In other cases, the government makes a concious decision not to get involved. In this class, we explore how, when, and why governments adopt industrial and technology policy.
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April 8, 1999 |
Electronic Commerce[Bailey and Joe Bass, RAMS]We will discuss the growing importance of electronic commerce for intra- and interorganizational transactions to support a growing global economy. With our guest speaker, we will explore some applications of electronic commerce and the competitive environment of the Internet. This includes the reasons why to adopt information technologies and electronic commerce standards such as Electronic Data Interchange. How a company can use information technology as an advantage is explored through the use of two examples: intermediation in markets and price discrimination.
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April 15, 1999 |
Diffusion of Innovations & Economics of Standards[Bailey and Gary Poon, DTVision]DescriptionThe use of standards in telecommunications and other technology fields dictate future technology development and the possible protection of consumers. This class will discuss who and why standards are created including the economic benefits and costs of de facto and de jure standards. The specific purpose of promoting interoperability in telecommunications and computer industries is discussed. Part of the new telecommunications and technology environments includes the convergence of markets and the use of venture capital to grow market share. New technology offerings which span the markets of telecommunications, computers, the Internet, and broadcasting are discussed. The difficulty of regulation of some new markets are discussed with Internet telephony as a case study. Many technology development can trace their history back to government and academic roots in their pre-competitive stages. Why and how the government can get involved in the funding of technology including dual-use technologies and technology transfer are discussed.
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April 22, 1999 |
Case Studies in Telecommunications and Technology Policy[Student Presentations]DescriptionStudents will pressent their findings from their final projects. The topics span issues in telecommunications and technology policy.
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April 29, 1999 |
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May 6, 1999 |
No Class - Conflict with Ethics ELM |
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May 13, 1999 |
Telecommunications, Technology, and the Global Marketplace for Ideas[Bailey]DescriptionThis is the last class for the course and will include student presentations. In the remaining time, Prof. Bailey will tie together the concepts which spanned the class discussions and open up the discussion to lingering issues.
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May 20, 1999 |
12:30-3:30 in 1202 VMH |
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