Additional information is available for the following registered author(s):

• Machiel Mulder

Contrary to other network industries, the telecommunications industry is more and more characterized by competing network technologies, such as cable, copper, and wireless. Regulation is, however, still needed as in several components of telecommunications sources of market power remain. The key issue in the regulation of access to a network is the possible trade-off between static efficiency and dynamic efficiency. Favourable conditions for access to the network contribute to allocative efficiency and productive efficiency, but can negatively affect incentives for investments in upgrading of existing infrastructures and developing new ones.

In the Netherlands, regulation of the telecommunication industry is designed to enhance competition between alternative infrastructures without affecting the technology choice of both incumbents and entrants. In the market for unbundled access to the local loop and the market for high quality wholesale access, a trade-off exists between static efficiency and dynamic efficiency. Regulated access tariffs, which are based on average costs, seem to be a good compromise between static and dynamic efficiency. Tariffs for access to the local loop reflect actual costs of the existing copper infrastructure, giving entrants incentives to make efficient make-or-buy decisions. In addition, the threat of infrastructure competition in the local loop, as well as the service-based competition between providers using different infrastructures, i.e. copper and cable, provide incentives for the incumbent to increase efficiency.

Our overall conclusion is that Dutch regulation of the telecommunication industry gives efficient incentives for technological developments such as the deployment of broadband.

Download Info

To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

Publisher Info

Paper provided by CPB Netherlands Bureau for Economic Policy Analysis in its series CPB Memoranda with number 131.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length:
Date of creation: Dec 2005
Date of revision:
Handle: RePEc:cpb:memodm:131

Contact details of provider:
Postal: Postbus 80510, 2508 GM Den Haag
Phone: (070) 338 33 80
Fax: (070) 338 33 50
Email:
Web page: http://www.cpb.nl/
More information through EDIRC

For technical questions regarding this item, or to correct its listing, contact: ().

Related research

Keywords: telecommunication; telecom; network; network industries; broadband; regulation; market failure;

Find related papers by JEL classification:
L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
O38 - Economic Development, Technological Change, and Growth - - Technological Change - - - Government Policy

This paper has been announced in the following NEP Reports:

• NEP-ALL-2005-12-20 (All new papers)
• NEP-COM-2005-12-20 (Industrial Competition)
• NEP-ICT-2005-12-20 (Information & Communication Technologies)
• NEP-NET-2005-12-20 (Network Economics)
• NEP-REG-2005-12-20 (Regulation)
• NEP-TID-2005-12-20 (Technology & Industrial Dynamics)

Statistics

Access and download statistics

Did you know? The yearly budget of IDEAS is exactly $0: it relies entirely on volunteer work.

This page was last updated on 2009-11-20.