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How to price the unbundled local loop in the transition from copper to fiber access networks?

Listed author(s):
  • Neumann, Karl-Heinz
  • Vogelsang, Ingo

In many countries worldwide access networks are in the transition from copper to fiber access. During the transition phase copper and fiber networks are operated in parallel. All regulators facing this situation of technological change have to decide how to price unbundled access to the copper loop in this transition phase. Should they keep the usual forward looking long-run incremental cost standard charge, or should they move to some different approach? The authors propose to price copper access based on the modern equivalent asset (MEA) of fiber access. Since fiber access is superior to copper access, the cost of fiber access (as a basis for pricing copper access) should, however, be corrected by the performance delta between copper and fiber access.

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Article provided by Elsevier in its journal Telecommunications Policy.

Volume (Year): 37 (2013)
Issue (Month): 10 ()
Pages: 893-909

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Handle: RePEc:eee:telpol:v:37:y:2013:i:10:p:893-909
DOI: 10.1016/j.telpol.2013.05.011
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  1. Bourreau, Marc & Cambini, Carlo & Doğan, Pınar, 2012. "Access pricing, competition, and incentives to migrate from “old” to “new” technology," International Journal of Industrial Organization, Elsevier, vol. 30(6), pages 713-723.
  2. Mandy David M. & Sharkey William W., 2003. "Dynamic Pricing and Investment from Static Proxy Models," Review of Network Economics, De Gruyter, vol. 2(4), pages 1-37, December.
  3. von Ungern-Sternberg, Thomas, 1991. "Monopolistic Competition on the Pyramid," Journal of Industrial Economics, Wiley Blackwell, vol. 39(4), pages 355-368, June.
  4. Steffen HOERNIG & Stephan JAY & Werner NEU & Karl-Heinz NEUMANN & Thomas PLÜCKEBAUM & Ingo VOGELSANG, 2012. "Wholesale Pricing, NGA Take-Up and Competition," Communications & Strategies, IDATE, Com&Strat dept., vol. 1(86), pages 153-174, 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.
  6. Evans, Lewis T. & Guthrie, Graeme A., 2005. "Risk, price regulation, and irreversible investment," International Journal of Industrial Organization, Elsevier, vol. 23(1-2), pages 109-128, February.
  7. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
  8. Degraba, Patrick, 2003. "A Bottleneck Input Supplier's Opportunity Cost of Competing Downstream," Journal of Regulatory Economics, Springer, vol. 23(3), pages 287-297, May.
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