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Stepping stones and access holidays: The fallacies of regulatory micro-management

  • Knieps, Günter
  • Zenhäusern, Patrick
Registered author(s):

    Good intentions are no substitute for sound economic regulation. Using the 'investment ladder' as the stick and access holidays as the carrot is hardly an effective way to generate competition. On the contrary, this approach creates a regulatory spiral. What regulators plead for today is in effect an obligatory sharing regime for nearly all network elements. However, this splitting up of networks into their elements by ad hoc regulatory interventions is destroying consumer welfare. Instead, rule-based regulation of network-specific market power should be implemented by means of a disaggregated regulatory mandate, limiting incentive regulation to essential facilities as a whole.

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    Paper provided by University of Freiburg, Institute for Transport Economics and Regional Policy in its series Discussion Papers with number 123.

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    Date of creation: 2009
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    Handle: RePEc:zbw:aluivr:123
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    1. M.E. Beesley & S.C. Littlechild, 1989. "The Regulation of Privatized Monopolies in the United Kingdom," RAND Journal of Economics, The RAND Corporation, vol. 20(3), pages 454-472, Autumn.
    2. Cave, Martin & Vogelsang, Ingo, 0. "How access pricing and entry interact," Telecommunications Policy, Elsevier, vol. 27(10-11), pages 717-727, November.
    3. Valletti, Tommaso M., 0. "The theory of access pricing and its linkage with investment incentives," Telecommunications Policy, Elsevier, vol. 27(10-11), pages 659-675, November.
    4. Schankerman, Mark, 1996. "Symmetric regulation for competitive telecommunications," Information Economics and Policy, Elsevier, vol. 8(1), pages 3-23, March.
    5. Bauer, Johannes M., 2005. "Unbundling Policy in the United States Players, Outcomes and Effects," MPRA Paper 2455, University Library of Munich, Germany.
    6. Gasmi, Farid & Laffont, Jean-Jacques & Sharkey, William, 1999. "Competition, Universal Service and Telecommunications Policy in Developing Countries," IDEI Working Papers 92, Institut d'Économie Industrielle (IDEI), Toulouse.
    7. G. Knieps, 2005. "Telecommunications Markets in the Stranglehold of EU Regulation: On the need for a disaggregated regulatory contract," Competition and Regulation in Network Industries, Intersentia, vol. 6(2), pages 75-94, June.
    8. Knieps, Gunter, 1997. "Phasing Out Sector-Specific Regulation in Competitive Telecommunications," Kyklos, Wiley Blackwell, vol. 50(3), pages 325-39.
    9. Joshua S. Gans & Stephen P. King, 2004. "Access Holidays and the Timing of Infrastructure Investment," The Economic Record, The Economic Society of Australia, vol. 80(248), pages 89-100, 03.
    10. Blankart, Charles B & Knieps, Gunter, 1989. "What Can We Learn from Comparative Institutional Analysis? The Case of Telecommunications," Kyklos, Wiley Blackwell, vol. 42(4), pages 579-98.
    11. Knieps, Günter, 2005. "Telecommunications markets in the stranglehold of EU regulation: on the need for a disaggregated regulatory contract," Discussion Papers 109 [rev.], University of Freiburg, Institute for Transport Economics and Regional Policy.
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