Access pricing: A comparison between full deregulation and two alternative instruments of access price regulation, cost-based and retail-minus
AbstractIn this paper, two instruments of access price regulation, cost-based and retail-minus, are compared with the full deregulation hypothesis. For this purpose, a model that considers an upstream monopolist firm that sells a vital input to an independent firm and to a subsidiary firm in the downstream market is developed. The main conclusion of the paper is that retail-minus regulation avoids foreclosure and leads to better results than cost-based regulation in terms of investment level and consumer surplus. Moreover, retail-minus regulation allows a higher consumer surplus than deregulation of access price as long as the regulator carefully defines the retail-minus instrument.
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Bibliographic InfoArticle provided by Elsevier in its journal Telecommunications Policy.
Volume (Year): 31 (2007)
Issue (Month): 5 (June)
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Web page: http://www.elsevier.com/wps/find/journaldescription.cws_home/30471/description#description
Other versions of this item:
- Paula Sarmento & António Brandão, 2006. "Access Pricing: A Comparison Between Full Deregulation and Two Alternative Instruments of Access Price Regulation, Cost-Based and Retail-Minus," CEF.UP Working Papers 0603, Universidade do Porto, Faculdade de Economia do Porto.
- L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
- L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
- L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications
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