Managerial Economics 12th Edition by Mark Hirschey

Exercise 9

The former chairman of the Federal Communications Commission heralded Voice over Internet Protocol, or VoIP, as "the most important shift in the entire history of modern communications since the invention of the telephone." Using cheap computer software and the Internet, VoIP offers consumers bargain-priced voice and data communication services. In the process, VoIP threatens to make obsolete the regional Bell operating companies' (RBOCs) $125 billion investment in conventional telephone networks. Explain the risks involved with regulatory policies that encourage or discourage VoIP adoption. What should the government do?