IDEAS home Printed from https://ideas.repec.org/a/kap/regeco/v28y2005i3p327-343.html
   My bibliography  Save this article

Asymmetric Regulation of Access and Price Discrimination in Telecommunications

Author

Listed:
  • Martin Peitz

    ()

Abstract

Suppose that a strong and a weak operator compete in a telecommunications market. To terminate a call operators need access to the competitor’s network if the call is off-net. Operators set two-part tariffs and price-discriminate according to termination of a call. Suppose as a benchmark that access prices are regulated at costs. I show that the weak operator’s profit and consumer welfare increase if the regulator sets a higher price to access the weak operator’s network. However, total surplus decreases even locally. Copyright Springer Science+Business Media, Inc. 2005

Suggested Citation

  • Martin Peitz, 2005. "Asymmetric Regulation of Access and Price Discrimination in Telecommunications," Journal of Regulatory Economics, Springer, vol. 28(3), pages 327-343, November.
  • Handle: RePEc:kap:regeco:v:28:y:2005:i:3:p:327-343
    DOI: 10.1007/s11149-005-3963-1
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/s11149-005-3963-1
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Cambini, Carlo & Valletti, Tommaso M., 2003. "Network competition with price discrimination: 'bill-and-keep' is not so bad after all," Economics Letters, Elsevier, vol. 81(2), pages 205-213, November.
    2. Milgrom, Paul & Roberts, John, 1990. "Rationalizability, Learning, and Equilibrium in Games with Strategic Complementarities," Econometrica, Econometric Society, vol. 58(6), pages 1255-1277, November.
    3. Ingo Vogelsang, 2003. "Price Regulation of Access to Telecommunications Networks," Journal of Economic Literature, American Economic Association, vol. 41(3), pages 830-862, September.
    4. Peitz, Martin, 2005. "Asymmetric access price regulation in telecommunications markets," European Economic Review, Elsevier, vol. 49(2), pages 341-358, February.
    5. Armstrong, Mark, 2004. "Network interconnection with asymmetric networks and heterogeneous calling patterns," Information Economics and Policy, Elsevier, vol. 16(3), pages 375-390, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sjaak Hurkens & Ángel Luis López, 2011. "The Welfare Effects of Mobile Termination Rate Regulation in Asymmetric Oligopolies: the Case of Spain," Working Papers 11-09, NET Institute.
    2. Hoernig, Steffen, 2007. "On-net and off-net pricing on asymmetric telecommunications networks," Information Economics and Policy, Elsevier, vol. 19(2), pages 171-188, June.
    3. Peitz, Martin & Valletti, Tommaso, 2014. "Reassessing competition concerns in electronic communications markets," ZEW Discussion Papers 14-101, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    4. Hurkens, Sjaak & López, Ángel L., 2012. "The welfare effects of mobile termination rate regulation in asymmetric oligopolies: The case of Spain," Telecommunications Policy, Elsevier, vol. 36(5), pages 369-381.
    5. Nikolaos Georgantzis & Carlos Gutiérrez-Hita, 2008. "Service provision on a network with endogenous consumption capacity," Working Papers. Serie AD 2008-01, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    6. Hinnerk Gnutzmann, 2014. "Price Discrimination in Asymmetric Industries: Implications for Competition and Welfare," DISCE - Working Papers del Dipartimento di Economia e Finanza def019, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    7. Torben Stühmeier, 2013. "Access regulation with asymmetric termination costs," Journal of Regulatory Economics, Springer, vol. 43(1), pages 60-89, January.
    8. Yu-Shan Lo, "undated". "Market Shares, Consumer Ignorance and the Reciprocal Termination Charges," Discussion Papers 09/19, Department of Economics, University of York.
    9. Hoernig, Steffen, 2008. "Tariff-Mediated Network Externalities: Is Regulatory Intervention Any Good?," CEPR Discussion Papers 6866, C.E.P.R. Discussion Papers.
    10. repec:dau:papers:123456789/79 is not listed on IDEAS
    11. Edmond Baranes & Cuong Huong Vuong, 2012. "Policy Implications of Asymmetric Termination Rate Regulation in Europe," Chapters,in: Regulation and the Performance of Communication and Information Networks, chapter 14 Edward Elgar Publishing.
    12. Hoernig, Steffen, 2014. "Competition between multiple asymmetric networks: Theory and applications," International Journal of Industrial Organization, Elsevier, vol. 32(C), pages 57-69.
    13. Lee, Dongyeol, 2015. "Regulating termination charges in asymmetric oligopolies," Information Economics and Policy, Elsevier, vol. 32(C), pages 16-28.
    14. Howell, Bronwyn, 2007. "A Pendulous Progression: New Zealand's Telecommunications Regulation 1987-2007," Working Paper Series 3974, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.
    15. Edmond Baranes & Cuong Vuong, 2012. "Competition with asymmetric regulation of mobile termination charges," Journal of Regulatory Economics, Springer, vol. 42(2), pages 204-222, October.
    16. Steffen Hoernig, 2008. "Market Penetration and Late Entry in Mobile Telephony," Working Papers 08-38, NET Institute, revised Oct 2008.
    17. Kjetil Andersson & Øystein Foros & Bjørn Hansen, 2016. "Empirical Evidence on the Relationship between Mobile Termination Rates and Firms' Profits," Scandinavian Journal of Economics, Wiley Blackwell, vol. 118(1), pages 129-149, January.
    18. repec:ctc:serie1:def19 is not listed on IDEAS

    More about this item

    Keywords

    access price; entry; interconnection charge; regulation; telecommunications; termination-based price discrimination; L96; L51; L13;

    JEL classification:

    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:regeco:v:28:y:2005:i:3:p:327-343. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla) or (Rebekah McClure). General contact details of provider: http://www.springer.com .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.