Please describe in your answer the economic principles from chapter 2 and 5 for the following questions. Your response should be no fewer than 300 words for each question. (70 points)

1. Describe the market for telephony services prior to the enactment of the 1996 Telecommunication Act in Germany. Why is it unlikely that DT would face new competition in the market for retail fixed-line telecommunication services prior to 1996?

2. In what forms could local-level wholesale access to DT’s fixed-telephone network take? Describe the price structure for wholesale access to this network. Describe how wholesale DT’s wholesale prices were regulated.

3. Describe the connection technologies available to retail consumers. What were DT’s price structures for these connection technologies? How were retail prices in the market for telephony services regulated?