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Access Regulation and the Adoption of VoIP

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  • Paul de Bijl

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  • M. Peitz

Abstract

In this paper, we analyze the effect of access regulation and retail price regulation of PSTN networks on the adoption of a new technology in the form of VoIP. The introduction of packet-switched telephony in the form of VoIP raises concerns about current regulatory practice of�access, which�has been designed for traditional telephony on PSTN networks. In particular, we show that with endogenous consumer choice between PSTN and VoIP telephony, higher prices for terminating access to the PSTN network make VoIP less likely to succeed and lead to lower profits of operators that offer VoIP telephony exclusively.

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Bibliographic Info

Paper provided by CPB Netherlands Bureau for Economic Policy Analysis in its series CPB Discussion Paper with number 109.

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Date of creation: Jul 2008
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Handle: RePEc:cpb:discus:109

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  1. Ingo Vogelsang, 2003. "Price Regulation of Access to Telecommunications Networks," Journal of Economic Literature, American Economic Association, vol. 41(3), pages 830-862, September.
  2. Paul Bijl & Martin Peitz, 2009. "Access regulation and the adoption of VoIP," Journal of Regulatory Economics, Springer, vol. 35(2), pages 111-134, April.
  3. Reiffen, David, 1998. "A Regulated Firm's Incentive to Discriminate: A Reevaluation and Extension of Weisman's Result," Journal of Regulatory Economics, Springer, vol. 14(1), pages 79-86, July.
  4. M Ali Khan, 2007. "Perfect Competition," Microeconomics Working Papers 22207, East Asian Bureau of Economic Research.
  5. Paul de Bijl & Martin Peitz, 2002. "New Competition in Telecommunications Markets: Regulatory Pricing Principles," CESifo Working Paper Series 678, CESifo Group Munich.
  6. Bijl, P.W.J. de & Peitz, M., 2005. "Local Loop Unbundling in Europe: Experience, Prospects and Policy Challenges," Discussion Paper 2005-008, Tilburg University, Tilburg Law and Economic Center.
  7. Armstrong, Mark & Doyle, Chris & Vickers, John, 1996. "The Access Pricing Problem: A Synthesis," Journal of Industrial Economics, Wiley Blackwell, vol. 44(2), pages 131-50, June.
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  10. Peitz, Martin, 2005. "Asymmetric access price regulation in telecommunications markets," European Economic Review, Elsevier, vol. 49(2), pages 341-358, February.
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  12. Armstrong, Mark, 2001. "The theory of access pricing and interconnection," MPRA Paper 15608, University Library of Munich, Germany.
  13. Bijl, P.W.J. de & Peitz, M., 2004. "Unbundling the Local Loop: One-Way Access and Imperfect Competition," Discussion Paper 2004-025, Tilburg University, Tilburg Law and Economic Center.
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  17. Foros, Oystein, 2004. "Strategic investments with spillovers, vertical integration and foreclosure in the broadband access market," International Journal of Industrial Organization, Elsevier, vol. 22(1), pages 1-24, January.
  18. Armstrong, Mark & Vickers, John, 1998. "The Access Pricing Problem with Deregulation: A Note," Journal of Industrial Economics, Wiley Blackwell, vol. 46(1), pages 115-21, March.
  19. Lewis, Tracy R. & Sappington, David E. M., 1999. "Access pricing with unregulated downstream competition," Information Economics and Policy, Elsevier, vol. 11(1), pages 73-100, March.
  20. Weisman, Dennis L, 1998. "The Incentive to Discriminate by a Vertically-Integrated Regulated Firm: A Reply," Journal of Regulatory Economics, Springer, vol. 14(1), pages 87-91, July.
  21. Jean-Jacques Laffont & Patrick Rey & Jean Tirole, 1998. "Network Competition: I. Overview and Nondiscriminatory Pricing," RAND Journal of Economics, The RAND Corporation, vol. 29(1), pages 1-37, Spring.
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Citations

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Cited by:
  1. Paul de Bijl & M. Peitz, 2008. "Access Regulation and the Adoption of VoIP," CPB Discussion Paper 109, CPB Netherlands Bureau for Economic Policy Analysis.
  2. Paul de Bijl & M. Peitz, 2010. "Regulatory legacy, VoIP adoption and investment incentives," CPB Discussion Paper 153, CPB Netherlands Bureau for Economic Policy Analysis.
  3. Torben Stühmeier, 2013. "Access regulation with asymmetric termination costs," Journal of Regulatory Economics, Springer, vol. 43(1), pages 60-89, January.
  4. Stühmeier, Torben, 2010. "Fixed to VoIP Interconnection: Regulation with Asymmetric Termination Costs," 21st European Regional ITS Conference, Copenhagen 2010: Telecommunications at new crossroads - Changing value configurations, user roles, and regulation 34, International Telecommunications Society (ITS).
  5. Bipasa Datta & Yu-Shan Lo, 2013. "To Block or not to Block? Network Competition when Skype enters the Mobile Market," Discussion Papers 13/32, Department of Economics, University of York.
  6. Paul de Bijl & Martin Peitz, 2006. "Broadband Access in Europe: Challenges for Policy and Regulation," CESifo DICE Report, Ifo Institute for Economic Research at the University of Munich, vol. 4(3), pages 10-15, October.

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