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Infrastructure-Based Versus Service-Based : Competition In Telecommunications

Author

Listed:
  • Lundborg, Jörg
  • Lundborg, Martin
  • Lundborg, Ernst-Olav

Abstract

Unbundling of the local loop (ULL) has seen quite different "success stories" in the various countries across Europe. Although the obligation for the provision of ULL was implemented in the regulatory framework early and mostly parallel to other means of liberalisation, national implementation has been rather heterogeneous. One question of decisive importance for national regulatory authorities (NRAs) was whether to foster service-based competition in the first phase of liberalisation or to focus on infrastructurebased competition. The different NRAs chose to head down different roads. This paper analyses whether the strategy of NRAs has had any mid-term effect on the economic welfare created in the communications markets. It indicates that infrastructure-based competition has a positive effect on innovation. Moreover, infrastructure-based competition appears to be more important for business customers than for residential clients. On the other hand, service-based competition lowers call prices and appears to be more important to residential markets. The results of this study point out the importance of a balanced approach to both types of policies.

Suggested Citation

  • Lundborg, Jörg & Lundborg, Martin & Lundborg, Ernst-Olav, 2006. "Infrastructure-Based Versus Service-Based : Competition In Telecommunications," MPRA Paper 3571, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:3571
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    File URL: https://mpra.ub.uni-muenchen.de/3571/1/MPRA_paper_3571.pdf
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    Cited by:

    1. Ho, Au Man, 2012. "Access regulation in the next generation access network environment: A comparative study of Hong Kong and Singapore from the transaction cost economics perspectives," 19th ITS Biennial Conference, Bangkok 2012: Moving Forward with Future Technologies - Opening a Platform for All 72495, International Telecommunications Society (ITS).
    2. Brito, Duarte & Pereira, Pedro & Vareda, João, 2011. "An assessment of the equality of access and no-regulation approaches to next generation networks," Telecommunications Policy, Elsevier, vol. 35(9), pages 818-826.

    More about this item

    Keywords

    competition; telecommunication; ladder of infrastructure; ladder of investement; regulatory policies;

    JEL classification:

    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications
    • L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation

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