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Title:Do we (still) need to regulate fixed network retail markets? PDF Logo
Authors:Briglauer, Wolfgang
Götz, Georg
Schwarz, Anton
Issue Date:2008
Series/Report no.:Joint discussion paper series in economics 2008,26
Abstract:In the beginning of fixed network liberalisation in Europe in the late 1990s, the main concern of regulators was to lower calls prices. This was done by introducing wholesale regulation and promoting service based competition. Some years later, the concern of some regulators turned from too high calls prices to too low calls prices which might squeeze entrants out of the market. We look at a simple model in which this development is explained by increasing competitive pressure from an outside opportunity, e.g. mobile telephony. We conclude that a margin squeeze is not necessarily used by the incumbent as a device to drive competitors out of the market and increase market power but can also result from increased inter-model competition. If this is the case, we argue that regulators should consider alternatives to cost oriented access prices such as retail minus or complete deregulation.
Subjects:access regulation
vertical integration
foreclosure
price squeeze
telecommunications
fixed networks
JEL:L12
L41
L42
L50
L96
Document Type:Working Paper
Appears in Collections:MAGKS Joint Discussion Paper Series in Economics, Universität Marburg

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