The rapid pace of technological change is placing the world's telephone companies in a very difficult position. Fiber optics cables, wireless telephones, digital signal compression, and sophisticated new switching equipment are lowering the cost of providing service and opening the gates to new competition. At the same time, these new technologies are providing the telephone companies with a wide array of new market opportunities. Unfortunately, their status as regulated carriers makes it difficult to exploit these new opportunities and to fend off competitive assaults on their traditional telephone business. As long as they are regulated, they can be accused of using their monopoly services to cross-subsidize new competitive ventures. But partial deregulation and open entry would be a catastrophe for them unless they were allowed to revise their rate structure. There is a widespread misconception that the U.S. telecommunications industry has been " deregulated" and that Canadian authorities are following the U.S. lead. In fact, most services remain regulated, even though some markets, such as long-distance services, equipment sales and rentals, and local services, have been opened up. This book reviews the recent changes in the structure of U.S. and Canadian telecommunications industries and the changes in regulatory policy on both sides of the border. The authors analyze the effects of these changes in regulation on telephone rates in both the local and long-distance markets with particular emphasis on the impacts of regulatory reforms and competition on long-distance rates. They use their results to suggest how regulation should be structured to allow competition to replacemonopoly on the road to the information superhighway. The authors contend that for decades misguided regulation of the telephone sector in both Canada and the U.S. denied consumers the benefits of competition, distorted local and long-distance telephone rates, and blocked entry of new carriers and new technologies. They warn that the continued regulation of the telecommunications industry could be responsible for slowing the transition from " plain old telephone service" to a telecommunications marketplace that offers a wide variety of services. They conclude by outlining the choices open to policymakers and calling for liberalized competition all along the information superhighway.

Motor vehicles are prominent among the flows of exports and/or imports for Canada, Germany, Japan, and the United States, and these trade flows are heavily influenced by the basic relative competitiveness of the production processes for automotive manufacturing. In this book the authors analyze the factors that contributed to the comparative cost competitiviness of the four countries' automotive industries over the period 1961-1984 and disentangle the factors contributing to the Japanese cost and efficiency advantages. The authors provide estimates of comparative costs of automobile production (both short-run and long-run) and the sources of these cost differences, based on the econometric cost function methodology. An innovation is the careful treatment of capacity utilization, one of the most important sources of short-run cost and efficiency differences. This methodology is also used effectively in an analysis of the Canada-U.S. Auto Pact, a unique experiment in trade liberalization. Previous estimates of cost and efficiency differences using the plant inspection and comparison of company financial reports methodologies are also evaluated.

In virtually every country, the price of residential access to the telephone network is kept low and cross-subsidized by business services, long distance calling, and various other telephone services. This pricing practice is widely defended as necessary to promote "universal service," but Crandall and Waverman show that it has little effect on telephone subscriptions while it has major harmful effects on the value of all telephone service. The higher prices for long distance calls reduce calling, shift the burden of paying for the network to those whose social networks are widely dispersed. Therefore, many poor and rural households--the intended beneficiaries of the pricing strategy--are forced to pay far more for telephone service than they would if prices reflected the cost of service. Despite these burdens, Congress has extended the subsidies to advanced services for schools, libraries, and rural health facilities. Crandall and Waverman show that other regulated utilities are not burdened with similarly inefficient cross-subsidy schemes, yet universality of water, natural gas, and electricity service is achieved. As local telephone service competition develops in the wake of the 1996 Telecommunications Act, the universal-service subsidy system will have to change. Subsidies will have to be paid from taxes on telecom services and paid directly to carriers or subscribers. Crandall and Waverman show that an intrastate tax designed to pay for each state's subsidized subscriptions is far less costly to the economy than an interstate tax. Robert W. Crandall is a senior fellow in Economic Studies at the Brookings Institution. Leonard Waverman is a visiting professor at the London Business School, on leave from the University of Toronto. They are coauthors of Talk Is Cheap: The Promise of Regulatory Reform in North American Telecommunications (Brookings, 1995).

International agreements on competition law and policy are notoriously difficult to implement. This collection examines the complexities involved when international co-ordination and harmonization of competition law and policy are considered. Presenting an analysis of the issues surrounding co-operation and convergence, a number of key factors are examined. These include the impact of differing anti-trust laws across borders on trade and investment, the effects on competition policy of international strategic alliances, mergers and acquisitions, the trade-off between firm privacy and antitrust needs in co-ordinating information flow across borders. The final section of the book addresses major policy themes in the context of how to proceed in the future.

Examines the issues of change in the international macroeconomy, in particular the rising investment demand from Eastern Europe which has resulted in dramatic investment flow changes. Focus is on Germany and its unique involvement in the changes

Motor vehicles are prominent among the flows of exports and imports for Canada, Germany, Japan and the United States, and these trade flows are heavily influenced by the basic relative competitiveness of the production processes for automotive manufacturing. In this book the authors analyse in depth the factors that contributed to the comparative cost competitiveness of the four countries' auto industries over the period 1961-84, and disentangle the factors contributing to the Japanese cost and efficiency advantages. Their main contribution is to provide estimates of comparative costs of automobile production (both short-run and long-run) and the sources of these cost differences, based on the econometric cost-function methodology. An innovation is the careful treatment of capacity utilization, one of the most important sources of short-run cost and efficiency differences. This methodology is also used effectively in an analysis of the Canada-US Auto Pact, a unique experiment in trade liberalization.

As with previous technological revolutions, innovations in the online world have triggered transformations in the labor market and the economy. While the Internet is trumpeted as a great job creator, there are also downsides that need to be identified and dealt with. The book discusses the following topics: Is the Internet a net creator of jobs? How are job profiles changed by the digital economy? What are the impacts on income distribution? Is it a winner-takes-all tournament? What models can facilitate adjustment without slowing innovation? This book features essays from major experts in the field coming from academia, international organizations, the private sector, and civil society. It blends theoretical and applied research presenting results from many countries, with particular emphasis on Europe, the USA, Canada and Asia.

In an attempt to maintain self-sufficiency, both Canadian and American federal authorities have imposed a number of restrictions on the inter-country flows of natural gas in North America -- tariffs, export and import permits, and quotas. The purpose of this study is to estimate how much less final consumers would pay for natural gas if free trade were allowed. A linear programming model is used to estimate a hypothetical flow pattern when no restrictions are placed on trans-border flows of gas. In comparing this free trade solution to a simulation of the actual flow pattern under trade restrictions, the costs to final consumers can be estimated. In addition, the regional gains and losses to producers can be measured. A chapter is devoted to investigating both the balance of payments effects of free trade adn the impact of the Canadian tariff on natural gas which existed from 1924 to 1967. A technique is devised to estimate the tariff necessary to prevent entry into the domestic market by foreign suppliers. The book should be of great interest to teachers of programming, economists, people in government, and individuals concerned about the effects of a continental energy policy.