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Access Regulation and the Adoption of VoIP

  • Paul de Bijl


  • M. Peitz

In this paper, we analyze the effect of access regulation and retail price regulation of PSTN networks on the adoption of a new technology in the form of VoIP. The introduction of packet-switched telephony in the form of VoIP raises concerns about current regulatory practice of�access, which�has been designed for traditional telephony on PSTN networks. In particular, we show that with endogenous consumer choice between PSTN and VoIP telephony, higher prices for terminating access to the PSTN network make VoIP less likely to succeed and lead to lower profits of operators that offer VoIP telephony exclusively.

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Paper provided by CPB Netherlands Bureau for Economic Policy Analysis in its series CPB Discussion Paper with number 109.

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Date of creation: Jul 2008
Date of revision:
Handle: RePEc:cpb:discus:109
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  1. Armstrong, Mark & Doyle, Chris & Vickers, John, 1996. "The Access Pricing Problem: A Synthesis," Journal of Industrial Economics, Wiley Blackwell, vol. 44(2), pages 131-50, June.
  2. de Bijl, P.W.J. & Peitz, M., 2005. "Local Loop Unbundling in Europe : Experience, Prospects and Policy Challenges," Discussion Paper 2005-008, Tilburg University, Tilburg Law and Economic Center.
  3. Armstrong, Mark, 2001. "The theory of access pricing and interconnection," MPRA Paper 15608, University Library of Munich, Germany.
  4. Armstrong, Mark, 1998. "Network Interconnection in Telecommunications," Economic Journal, Royal Economic Society, vol. 108(448), pages 545-64, May.
  5. Reiffen, David, 1998. "A Regulated Firm's Incentive to Discriminate: A Reevaluation and Extension of Weisman's Result," Journal of Regulatory Economics, Springer, vol. 14(1), pages 79-86, July.
  6. Armstrong, Mark & Vickers, John, 1998. "The Access Pricing Problem with Deregulation: A Note," Journal of Industrial Economics, Wiley Blackwell, vol. 46(1), pages 115-21, March.
  7. Vives, Xavier, 1990. "Nash equilibrium with strategic complementarities," Journal of Mathematical Economics, Elsevier, vol. 19(3), pages 305-321.
  8. M. Ali Khan, 2007. "Perfect Competition," PIDE-Working Papers 2007:15, Pakistan Institute of Development Economics.
  9. Jean-Jacques Laffont & Patrick Rey & Jean Tirole, 1998. "Network Competition: I. Overview and Nondiscriminatory Pricing," RAND Journal of Economics, The RAND Corporation, vol. 29(1), pages 1-37, Spring.
  10. Lewis, Tracy R. & Sappington, David E. M., 1999. "Access pricing with unregulated downstream competition," Information Economics and Policy, Elsevier, vol. 11(1), pages 73-100, March.
  11. Ingo Vogelsang, 2003. "Price Regulation of Access to Telecommunications Networks," Journal of Economic Literature, American Economic Association, vol. 41(3), pages 830-862, September.
  12. Laffont, Jean-Jacques & Tirole, Jean, 1996. "Creating Competition through Interconnection: Theory and Practice," Journal of Regulatory Economics, Springer, vol. 10(3), pages 227-56, November.
  13. L. Randall Wray & Stephanie Bell, 2004. "Introduction," Chapters, in: Credit and State Theories of Money, chapter 1 Edward Elgar.
  14. Peitz, Martin, 2005. "Asymmetric access price regulation in telecommunications markets," European Economic Review, Elsevier, vol. 49(2), pages 341-358, February.
  15. Manez, J.A. & Waterson, M., 2001. "Multiproduct Firms and Product Differentiation: a Survey," The Warwick Economics Research Paper Series (TWERPS) 594, University of Warwick, Department of Economics.
  16. Foros, Oystein, 2004. "Strategic investments with spillovers, vertical integration and foreclosure in the broadband access market," International Journal of Industrial Organization, Elsevier, vol. 22(1), pages 1-24, January.
  17. Paul Bijl & Martin Peitz, 2009. "Access regulation and the adoption of VoIP," Journal of Regulatory Economics, Springer, vol. 35(2), pages 111-134, April.
  18. Peitz, Martin & Valletti, Tommaso M. & Wright, Julian, 2004. "Competition in telecommunications: an introduction," Information Economics and Policy, Elsevier, vol. 16(3), pages 315-321, September.
  19. Weisman, Dennis L, 1998. "The Incentive to Discriminate by a Vertically-Integrated Regulated Firm: A Reply," Journal of Regulatory Economics, Springer, vol. 14(1), pages 87-91, July.
  20. Ebrill, Liam P. & Slutsky, Steven M., 1990. "Production efficiency and optimal pricing in intermediate-good regulated industries," International Journal of Industrial Organization, Elsevier, vol. 8(3), pages 417-442, September.
  21. Paul de Bijl & Martin Peitz, 2002. "New Competition in Telecommunications Markets: Regulatory Pricing Principles," CESifo Working Paper Series 678, CESifo Group Munich.
  22. Vives, Xavier, 2004. "Complementarities and Games: New Developments," CEPR Discussion Papers 4742, C.E.P.R. Discussion Papers.
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