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Access Regulation and the Adoption of VoIP

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  • Paul de Bijl
  • 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.

Suggested Citation

  • Paul de Bijl & M. Peitz, 2008. "Access Regulation and the Adoption of VoIP," CPB Discussion Paper 109, CPB Netherlands Bureau for Economic Policy Analysis.
    • Handle: RePEc:cpb:discus:109
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    References listed on IDEAS

    as
    1. Laffont, Jean-Jacques & Tirole, Jean, 1994. "Access pricing and competition," European Economic Review, Elsevier, vol. 38(9), pages 1673-1710, December.
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    18. Mark Armstrong & John Vickers, 1998. "The Access Pricing Problem with Deregulation: A Note," Journal of Industrial Economics, Wiley Blackwell, vol. 46(1), pages 115-121, March.
    19. Paul Bijl & Martin Peitz, 2009. "Access regulation and the adoption of VoIP," Journal of Regulatory Economics, Springer, vol. 35(2), pages 111-134, April.
    20. Paul de Bijl & Martin Peitz, 2002. "New Competition in Telecommunications Markets: Regulatory Pricing Principles," CESifo Working Paper Series 678, CESifo.
    21. 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.
    22. Vives, Xavier, 2004. "Complementarities and Games: New Developments," CEPR Discussion Papers 4742, C.E.P.R. Discussion Papers.
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    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Edmond Baranes, 2006. "Bundling and Collusion on Communications Markets," Working Papers 06-17, NET Institute, revised Oct 2006.
    2. Hoernig, Steffen & Bourreau, Marc & Cambini, Carlo, 2015. "Fixed-mobile substitution and termination rates," Telecommunications Policy, Elsevier, vol. 39(1), pages 65-76.
    3. Broos, Sébastien & Gautier, Axel, 2017. "The exclusion of competing one-way essential complements: Implications for net neutrality," International Journal of Industrial Organization, Elsevier, vol. 52(C), pages 358-392.
    4. Torben Stühmeier, 2013. "Access regulation with asymmetric termination costs," Journal of Regulatory Economics, Springer, vol. 43(1), pages 60-89, January.
    5. 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).
    6. Bourreau, Marc & Lupi, Paolo & Manenti, Fabio M., 2014. "Old technology upgrades, innovation, and competition in vertically differentiated markets," Information Economics and Policy, Elsevier, vol. 29(C), pages 10-31.
    7. Paul de Bijl & Martin Peitz, 2006. "Broadband Access in Europe: Challenges for Policy and Regulation," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 4(3), pages 10-15, October.
    8. Lee, Dongyeol, 2015. "Regulating termination charges in asymmetric oligopolies," Information Economics and Policy, Elsevier, vol. 32(C), pages 16-28.
    9. 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.
    10. Paul Bijl & Martin Peitz, 2009. "Access regulation and the adoption of VoIP," Journal of Regulatory Economics, Springer, vol. 35(2), pages 111-134, April.
    11. Masoud Asghari & Saleh Yousefi, 2018. "Pricing mechanism for interconnection between phone operators and virtual mobile VoIP operators," Telecommunication Systems: Modelling, Analysis, Design and Management, Springer, vol. 67(1), pages 133-147, January.
    12. repec:ces:ifodic:v:4:y:2006:i:3:p:14567467 is not listed on IDEAS
    13. repec:cpb:discus:153 is not listed on IDEAS

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    More about this item

    JEL classification:

    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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