Learning Team Deliverable: Case Study
Learning Team Deliverable
Russell Mattox, Justin Conaway, Collette Hamilton, Elaina Gatto, Erica Shaw
ECO/ 561
December 15, 2014
Michael Trousdale
Learning Team Deliverable
Introduction
In this week team assignment, we will answer some questions about AT&T phone services. We will provide you with information about the company long distance phone services from the natural monopoly side. Which is what we read this week in our class reading. You will also find satellite increased and reshaped the cost structure of long distance phone services by AT&T. Lastly, we will discuss how we should be a more efficient market when it comes to long distance services as well as regulating monopolies for local phone services.
Why was long- distance phone service originally a natural monopoly?
The original AT&T was the majority owner of most of the phone lines in the country. AT&T limited competition by expanding and adding their structures to areas in need of phone lines. All competitors had to pay AT&T a fee to connect long- distance …show more content…
AT&T once a regulated monopoly, controlled the market and was able to charge regulated high prices for its long distance service. With the increased use of satellite, AT&T 's cost structure has was forced to change. It lifted the cost constraint for consumers due to the competition it created with an increase in satellite usage. The progress and innovation in telecommunications technologies have been rapid since the introduction of satellite and is expected to continue. As a result of the change, the cost conditions shifted causing the market to transform and requires a different cost structure of lower rates. "The technological explosion has accelerated exponentially since the 1970 's and in long distance, service prices were gradually deregulated as the incumbent AT&T lost market share, and new entrants grew." (Hausman, Jerry A; Taylor, William
Russell Mattox, Justin Conaway, Collette Hamilton, Elaina Gatto, Erica Shaw
ECO/ 561
December 15, 2014
Michael Trousdale
Learning Team Deliverable
Introduction
In this week team assignment, we will answer some questions about AT&T phone services. We will provide you with information about the company long distance phone services from the natural monopoly side. Which is what we read this week in our class reading. You will also find satellite increased and reshaped the cost structure of long distance phone services by AT&T. Lastly, we will discuss how we should be a more efficient market when it comes to long distance services as well as regulating monopolies for local phone services.
Why was long- distance phone service originally a natural monopoly?
The original AT&T was the majority owner of most of the phone lines in the country. AT&T limited competition by expanding and adding their structures to areas in need of phone lines. All competitors had to pay AT&T a fee to connect long- distance …show more content…
AT&T once a regulated monopoly, controlled the market and was able to charge regulated high prices for its long distance service. With the increased use of satellite, AT&T 's cost structure has was forced to change. It lifted the cost constraint for consumers due to the competition it created with an increase in satellite usage. The progress and innovation in telecommunications technologies have been rapid since the introduction of satellite and is expected to continue. As a result of the change, the cost conditions shifted causing the market to transform and requires a different cost structure of lower rates. "The technological explosion has accelerated exponentially since the 1970 's and in long distance, service prices were gradually deregulated as the incumbent AT&T lost market share, and new entrants grew." (Hausman, Jerry A; Taylor, William