A Regulatory Framework for New and Emerging Markets
AbstractThe future of the information society crucially depends on investments in upgrading existing infrastructures and building new networks. Traditional cost-based regulation, which focuses on issues of static efficiency and service-based competition necessarily has negative effects on innovation incentives and the emergence of infrastructure-based competition in the highly dynamic telecommunications industry. This paper presents a regulatory framework for new infrastructures, which makes ex ante regulation contingent to the tendency towards effective competitive structures. Unlike the standard Significant Market Power-test (SMP), this approach takes a longer term perspective and therefore secures operators' investment incentives. The proposal has several desirable incentive effects. Firstly, it counters incentives to free-ride on investments by potential competitors, and secondly, it makes preemptive and other predatory practices by the investing firm less attractive. As a result, our proposal of contingent regulation in emerging markets promotes infrastructure-based competition in telecommunications.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 2518.
Date of creation: Dec 2005
Date of revision:
new markets; infrastructure investments; regulation;
Find related papers by JEL classification:
- L90 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - General
- L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation
- K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
- L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-04-09 (All new papers)
- NEP-COM-2007-04-09 (Industrial Competition)
- NEP-REG-2007-04-09 (Regulation)
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