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Regulate or Deregulate: Influencing Network Interconnenction Charges

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  • Wielle, B. van de

    (Tilburg University, Center for Economic Research)

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    Abstract

    We study the choice between regulating interconnection charges or delegating their determination to the operators, both in a non-mature and a mature market. Three regulatory regimes are considered: full, cost-based and bill-and-keep. Delegation corresponds to bargaining about the interconnection charges using the regulatory schemes as disagreement outcomes.Applying regulation benefits the consumers.Under full regulation, access charges account for asymmetries and allow a unique Ramsey price.Delegation benefits the operators.In a mature market delegation robs the government of any market influence.In a non-mature market government preferences coincide with those of the largest operator and are disadvantageous for entry.

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    Bibliographic Info

    Paper provided by Tilburg University, Center for Economic Research in its series Discussion Paper with number 2003-68.

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    Date of creation: 2003
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    Handle: RePEc:dgr:kubcen:200368

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    Web page: http://center.uvt.nl

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    Keywords: regulations; delegation; telecommunication industry;

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