Regulations and Technology Diffusion: Cross Subsidies and Digital Infrastructure Creation

Abstract

Using contemporary historical data, the analysis has examined the impact of cross‐subsidization on technology diffusion within telecommunications networks for local exchange sector telecommunications firms in the United States for the years 1995 to 2000. Firms obtaining greater cross‐subsidies engage in greater technology diffusion via network modernization using digital technologies. Contingent on the institutional setting, cross subsidies have risen. These amounts have been put to relevant use in the diffusion of technology via deployment of digital infrastructure. The principles of subsidization are considered negatively as they have presumed anti‐competitive consequences. In technology diffusion they have played a positive role, as the evidence shows. From a radical subjectivist perspective, cross subsidies generate financial capital for firms, which permits them to deploy high quality technology investments such as broadband and these investments can be used for entrepreneurial experiments in providing several customer services.

Regulation and Job Creation: An Analysis of Institutional Change and Its Consequences

“…The background is important to understand the changes occurring and the details of this section are heavily derived from Majumdar (, , b), Majumdar et al () and Majumdar and Chang (). Sector‐related prior work had shown the Bell companies were the dominant US telephone operator by 1885 (Brock , Woroch ).…”

“…These companies have accounted for approximately ninety nine percent of the telephone lines installed in the USA. The data for these companies have been extensively used for many other analyses (Majumdar , , b, ).…”