| Introduction | 2 |
| Prerequisites of Efficient Innovation under the 1996 Telecommunications Act | 5 |
| Application of the Incremental Cost Rule and the Prices of Regulated Services | 7 |
| The Relationship of Incremental to Stand‐Alone Costs | 8 |
| Distributing the Benefit of Economies of Scope | 11 |
| The Fairness and Efficiency of Competition Under the Proposed Assignment of Investment Costs | 13 |
| The Conflict between Recourse to Cost “Allocations” and the Telecommunications Act | 16 |
| The Commission’s Only Correct Course Is to Abandon Its Cost Allocation Proceeding | 19 |
How to Treat the Costs of Shared Voice and Video Networks in a Post‐Regulatory Age
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About the Author
Alfred E. Kahn is the Robert Julius Thorne Professor of Political Economy, Emeritus, Cornell University and Special Consultant with National Economic Research Associates, Inc. (NERA).