Journal of Regulatory Economics

, Volume 43, Issue 1, pp 60–89 | Cite as

Access regulation with asymmetric termination costs

  • Torben StühmeierEmail author
Original Article


In many telecommunications markets incumbent providers enjoy a demand-side advantage over any entrant. However, market entrants may enjoy a supply-side advantage over the incumbent, since they are more efficient or operate on innovative technologies. Considering both a supply-side and a demand-side asymmetry, the present model analyzes the effect of two regulatory regimes: an access markup for a low cost network and reciprocal charges below the costs of a high cost network. Both regimes may have adverse effects on subscribers, market shares, and profits. It can be shown that an access markup is not generally beneficial and an access deficit not generally detrimental for the respective networks.


Termination charges Interconnection Asymmetric regulation Price discrimination 

JEL Classification

L13 L51 L96 


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. Bundesnetzagentur. (2011). Tätigkeitsbericht 2010/2011. Bonn.Google Scholar
  2. Carter M., Wright J. (1999) Interconnection in network industries. Review of Industrial Organization 14(1): 1–25CrossRefGoogle Scholar
  3. Carter M., Wright J. (2003) Asymmetric network interconnection. Review of Industrial Organization 22(1): 27–46CrossRefGoogle Scholar
  4. De Bijl P., Peitz M. (2002) Regulation and entry into telecommunications markets. Cambridge University Press, CambridgeGoogle Scholar
  5. De Bijl P., Peitz M. (2009) Access regulation and the adoption of VoIP. Journal of Regulatory Economics 35(2): 111–134CrossRefGoogle Scholar
  6. EU Commission. (2009). Commission recommendation on the regulatory treatment of fixed and mobile termination rates in the EU. Brussels: EU Commission.Google Scholar
  7. Harbord, D., & Hoernig, S. (2010). Welfare analysis of regulating mobile termination rates in the UK (with an application to the Orange/T-Mobile merger). CEPR discussion paper no. 7730.Google Scholar
  8. Hoernig, S. (2009). Competition between multiple asymmetric networks: A toolkit and applications. Mimeo. FEUNL.Google Scholar
  9. Kocsis V. (2007) Access pricing under cost asymmetry. In: Haucap J., Dewenter R. (Eds.) Access pricing: Theory and practice. Elsevier, Amsterdam, pp 149–175Google Scholar
  10. Laffont J.-J., Rey P., Tirole J. (1998) Network competition: I. Overview and nondiscriminatory pricing. Rand Journal of Economics 29(1): 1–37CrossRefGoogle Scholar
  11. Marcus, S., & Elixmann, D. (2008). The future of IP interconnection: Technical, economic, and public policy aspects. Technical report. WIK-Consult.Google Scholar
  12. Ofcom. (2010). Wholesale mobile voice call termination: Market review, Volume 2 - Main consultation. London.Google Scholar
  13. Peitz M. (2005a) Asymmetric access price regulation in telecommunications markets. European Economic Review 49(2): 341–358CrossRefGoogle Scholar
  14. Peitz M. (2005b) Asymmetric regulation of access and price discrimination in telecommunications. Journal of Regulatory Economics 28(3): 327–343CrossRefGoogle Scholar
  15. Valletti T. M., Cambini C. (2005) Investments and network competition. Rand Journal of Economics 36(2): 446–467Google Scholar

Copyright information

© Springer Science+Business Media, LLC 2012

Authors and Affiliations

  1. 1.Düsseldorf Institute for Competition Economics (DICE)Heinrich-Heine-University DüsseldorfDüsseldorfGermany

Personalised recommendations