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Journal of Regulatory Economics

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

Access regulation with asymmetric termination costs

  • Torben StühmeierEmail author
Original Article

Abstract

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.

Keywords

Termination charges Interconnection Asymmetric regulation Price discrimination 

JEL Classification

L13 L51 L96 

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Copyright information

© Springer Science+Business Media, LLC 2012

Authors and Affiliations

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

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