The U.S. telecommunications market is
experiencing structural changes brought about by sharply falling
telecommunication costs, privatization, the Internet and its related
technologies, and a web of dynamic new relationships. The article gives a
systematic perspective on this critical industry. Within the context of the
1996 telecommunications Act, 127 partnerships were mapped onto a framework
consisting of the industry's major players. Interestingly, about 33% of these
partnerships involved distribution companies trying to build large
infrastructures in hopes of gaining economies of scale and scope. Communication
and distribution company partnerships were also significant, given the need for
distributors to gain direct access to individual consumers. Overall, these
partnerships seem intended to create new value, gaining primary control over
particular technologies, increasing market access, creating shelf space,
achieving economies of scale and scope, preempting competitors, or simply
hedging bets in a business world characterized by technological and regulatory
uncertainty. INSET: The Telecommunications Act of 1996.