The momentum for network separation: a guide for regulators
NGAs (Next Generation Access Networks) are a challenge to regulators and operators insofar as they require large investments, there is significant uncertainty about the ability to recover costs, and the choice of the appropriate regulatory regime is far from consensual. Regulatory authorities might want to seize the moment and reconsider the mandatory vertical separation of telecommunication firms, without jeopardizing incentives to innovation, investment and welfare. We provide a provocative but simple test for the adequacy of network separation as a regulatory remedy. We propose a decision tree procedure with four steps in order to assess whether network separation is an adequate regulatory response:  “Is there significant market power in the market for the provision of access services under NGAs?”;  “Are there few vertical complementarities between services along the supply chain?”;  “Is functional separation a better regulatory tool than any other alternative?”; and  “Is structural separation superior to functional separation?”. A positive answer to the first three questions implies that the regulator should consider functional network separation, whilst the fourth is needed for the structural alternative.
|Date of creation:||Jan 2009|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: +351 226 196 200
Fax: +351 226 196 291
Web page: http://www.feg.porto.ucp.pt/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Dixit, Avinash K & Stiglitz, Joseph E, 1977.
"Monopolistic Competition and Optimum Product Diversity,"
American Economic Review,
American Economic Association, vol. 67(3), pages 297-308, June.
- Dixit, Avinash K & Stiglitz, Joseph E, 1975. "Monopolistic Competition and Optimum Product Diversity," The Warwick Economics Research Paper Series (TWERPS) 64, University of Warwick, Department of Economics.
- Russell Pittman, 2003. "Vertical Restructuring (or Not) of the Infrastructure Sectors of Transition Economies," Journal of Industry, Competition and Trade, Springer, vol. 3(1), pages 5-26, March.
- Cave, Martin, 2006. "Six Degrees of Separation : Operational Separation as a Remedy in European Telecommunications Regulation," MPRA Paper 3572, University Library of Munich, Germany.
- Pittman Russell, 2005. "Structural Separation to Create Competition? The Case of Freight Railways," Review of Network Economics, De Gruyter, vol. 4(3), pages 1-16, September.
- Fabian KIRSCH & Christian von HIRSCHHAUSEN, 2008.
"Regulation of NGN: Structural Separation, Access Regulation, or No Regulation at All?,"
Communications & Strategies,
IDATE, Com&Strat dept., vol. 1(69), pages 63-84, 1st quart.
- Kirsch, Fabian & Hirschhausen, Christian von, 2008. "Regulation of NGN: Structural Separation, Access Regulation, or No Regulation at All?," MPRA Paper 8822, University Library of Munich, Germany.
- Paul de Bijl, 2005. "Structural Separation and Access in Telecommunications Markets," CESifo Working Paper Series 1554, CESifo Group Munich.
When requesting a correction, please mention this item's handle: RePEc:cap:wpaper:032009. 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: (Ricardo Goncalves)
If references are entirely missing, you can add them using this form.