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Competition in a Pure World of Internet Telephony

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  • Christoph Engel

    (Max Planck Institute for Research on Collective Goods, Bonn)

Abstract

From the angle of competition policy, Voice over IP looks like a panacea. It not only brings better service, but it also increases competitive pressure on former telecommunications monopolists. This paper points to the largely overlooked downside. In a pure world of Internet telephony, there would be no charge for individual calls, nor for telephony, as distinct from other services running over the uniform network. Specifically, establishing property rights for either of these would be costly, whereas these property rights were automatic and free of charge in switched telephony. Giving voice over IP providers classic telephone numbers would enhance systems competition with switched telephony. But this would make it more difficult for clients to swap providers. The anti-competitive caller pays principle would extend to IP telephony.

Suggested Citation

  • Christoph Engel, 2007. "Competition in a Pure World of Internet Telephony," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2007_1, Max Planck Institute for Research on Collective Goods.
    • Handle: RePEc:mpg:wpaper:2007_1
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    References listed on IDEAS

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    More about this item

    Keywords

    property right; non-linear pricing; pure bundling; club good; cross-subsidisation; packet switched telephony;
    All these keywords.

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software

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