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Ex-ante margin squeeze tests in the telecommunications industry: What is a reasonable efficient operator? (Revised: December 20, 2012)

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  • Gaudiny, Germain
  • Saavedra Valenzuela, Claudia
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    Abstract

    We study the implementation of reasonably efficient operator margin squeeze tests by National Regulatory Authorities in European telecommunications markets. We provide a theoretical framework in which we show how regulatory authorities deal with the asymmetries between the entrants and the incumbent by adjusting the equally efficient operator margin squeeze test used in competition policy. Using this framework, we build a benchmark of implementation choices by inspecting authorities' guidelines, market analyses and decisions. We find that some implementation choices are very similar across the authorities' decisions, whereas some others are dealt with quite heterogeneously. --

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    File URL: http://econstor.eu/bitstream/10419/67955/1/733609961.pdf
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    Bibliographic Info

    Paper provided by International Telecommunications Society (ITS) in its series 23rd European Regional ITS Conference, Vienna 2012 with number 67955.

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    Date of creation: 2012
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    Handle: RePEc:zbw:itse12:67955

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    Web page: http://www.itseurope.org/

    Related research

    Keywords: Margin squeeze; Imputation test; Regulation; Telecommunications;

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    1. Dennis W. Carlton & Michael Waldman, 2002. "The Strategic Use of Tying to Preserve and Create Market Power in Evolving Industries," RAND Journal of Economics, The RAND Corporation, vol. 33(2), pages 194-220, Summer.
    2. Bouckaert, Jan & Verboven, Frank, 2003. "Price Squeezes in a Regulatory Environment," CEPR Discussion Papers 3824, C.E.P.R. Discussion Papers.
    3. Biglaiser, Gary & DeGraba, Patrick, 2001. "Downstream Integration by a Bottleneck Input Supplier Whose Regulated Wholesale Prices Are Above Costs," RAND Journal of Economics, The RAND Corporation, vol. 32(2), pages 302-15, Summer.
    4. Henry ERGAS & Eric RALPH & Emma LANIGAN, 2010. "Price Squeezes and Imputation Tests on Next Generation Access Networks," Communications & Strategies, IDATE, Com&Strat dept., vol. 1(78), pages 67-86, 2nd quart.
    5. Briglauer, Wolfgang & Vogelsang, Ingo, 2011. "The need for a new approach to regulating fixed networks," Telecommunications Policy, Elsevier, vol. 35(2), pages 102-114, March.
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