Universal Service and Entry: The Role of Uniform Pricing and Coverage Constraints

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Universal Service and Entry: The Role of Uniform Pricing and Coverage Constraints

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Valletti, Tommaso M
Hoernig, Steffen
Barros, Pedro P

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Abstract

Universal service objectives are pervasive in telecommunications, and have gained new relevance after the introduction of competition in many markets. Despite their policy relevance, little work has been done allowing for a thorough discussion of instruments designed to achieve universal service objectives under competition. We intend to fill this gap, and disaggregate the problem into interacting forms of regulatory intervention such as uniform pricing and coverage constraints. It is shown that these are not competitively neutral and may have far-reaching strategic effects. Under uniform pricing, equilibrium coverage of both incumbent and entrant may be lower than without regulation. These effects depend on which measures are imposed at the same time, thus no single measure can be evaluated in isolation. We also point out that different groups of consumers are affected in different ways, making welfare comparisons difficult. Copyright 2002 by Kluwer Academic Publishers

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Publisher Info
Article provided by Springer in its journal Journal of Regulatory Economics.

Volume (Year): 21 (2002)
Issue (Month): 2 (March)
Pages: 169-90
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Handle: RePEc:kap:regeco:v:21:y:2002:i:2:p:169-90

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Paper
- Hoernig, Steffen & Pita Barros, Pedro Luis & Valletti, Tommaso, 2001. "Universal Service and Entry: the Role of Uniform Pricing and Coverage Constraints," CEPR Discussion Papers 2789, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)

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Other versions:
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- Kyle Bagwell & Asher Wolinsky, 2000. "Game Theory and Industrial Organization," Discussion Papers 1307, Northwestern University, Center for Mathematical Studies in Economics and Management Science. [Downloadable!]
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Other versions:
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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

Ramiro Losada, 2004. "On The Definition Of Affordable Prices Under Universal Service Obligations," Economics Working Papers we044015, Universidad Carlos III, Departamento de Economía. [Downloadable!]
Hoernig, Steffen H. & Valletti, Tommaso M., 2002. "The Interplay Between Regulation and Competitions: The Case of Universal Service Obligations," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
Ramiro Losada, 2004. "Should Network Operators Be Allowed To Build Joint Facilities?," Economics Working Papers we043914, Universidad Carlos III, Departamento de Economía. [Downloadable!]
repec:mop:credwp:07.01.67 is not listed on IDEAS
Georg Götz, 2009. "Competition, Regulation, and Broadband Access to the Internet," MAGKS Papers on Economics 200924, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung). [Downloadable!]
Manuel Willington & Fabián Basso, 2006. "Regulación, Cobertura y Competencia en el Mercado de la Banda Ancha," ILADES-Georgetown University Working Papers inv177, Ilades-Georgetown University, School of Economics and Bussines. [Downloadable!]
Hoernig, Steffen, 2005. "Should Uniform Pricing Contraints be Imposed on Entrants?," CEPR Discussion Papers 5052, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
Other versions:
- Steffen Hoernig, 2006. "Should uniform pricing constraints be imposed on entrants?," Journal of Regulatory Economics, Springer, vol. 30(2), pages 199-216, 08. [Downloadable!] (restricted)
Hoerning, Steffen, 2002. "Should Uniform Pricing Constraints be Imposed on Entrants?," FEUNL Working Paper Series wp417, Universidade Nova de Lisboa, Faculdade de Economia. [Downloadable!]
Levine, Paul L & Rickman, Neil & Tzavara, Dionisia, 2002. "Market Entry and Roll-out With Product Differentiation," CEPR Discussion Papers 3237, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
Other versions:
- Tzavara, Dionisia & Paul Levine & Neil Rickman, 2002. "Market entry and roll-out with product differentiation," Royal Economic Society Annual Conference 2002 176, Royal Economic Society. [Downloadable!]
Jérome VICENTE (LEREPS-GRES) & Godefroy DANG NGUYEN (ENST-Bretagne - LUSSI & ICI-UBO), 2005. "Some remarks on Internet-based territorial planning: the role of local public institutions on the diffusion of broadband access (In French)," Cahiers du GRES 2005-23, Groupement de Recherches Economiques et Sociales. [Downloadable!]
Jaag, Christian, 2007. "Liberalization of the Swiss Letter Market and the Viability of Universal Service Obligations," MPRA Paper 6121, University Library of Munich, Germany. [Downloadable!]
Other versions:
- Christian Jaag, 2007. "Liberalization of the Swiss Letter Market and the Viability of Universal Service Obligations," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 143(III), pages 261-282, September. [Downloadable!]
Poudou, J.C. & Roland, M. & Thomas, L., 2007. "Universal Service Obligations and Competition with Asymmetric Information," Cahiers du LASER (LASER Working Papers) 2007.22, LASER (Laboratoire de Science Economique de Richter), Faculty of Economics, University of Montpellier 1. [Downloadable!]
Mélisande Cardona & Anton Schwarz & B. Yurtoglu & Christine Zulehner, 2009. "Demand estimation and market definition for broadband Internet services," Journal of Regulatory Economics, Springer, vol. 35(1), pages 70-95, February. [Downloadable!] (restricted)

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