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Asymmetric Regulation of Access and Price Discrimination in Telecommunications*

Asymmetric Regulation of Access and Price Discrimination in Telecommunications* Suppose that a strong and a weak operator compete in a telecommunications market. To terminate a call operators need access to the competitor’s network if the call is off-net. Operators set two-part tariffs and price-discriminate according to termination of a call. Suppose as a benchmark that access prices are regulated at costs. I show that the weak operator’s profit and consumer welfare increase if the regulator sets a higher price to access the weak operator’s network. However, total surplus decreases even locally. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Regulatory Economics Springer Journals

Asymmetric Regulation of Access and Price Discrimination in Telecommunications*

Journal of Regulatory Economics , Volume 28 (3) – Aug 2, 2005

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References (19)

Publisher
Springer Journals
Copyright
Copyright © 2005 by Springer Science+Business Media, Inc.
Subject
Economics; Industrial Organization; Public Finance; Microeconomics
ISSN
0922-680X
eISSN
1573-0468
DOI
10.1007/s11149-005-3963-1
Publisher site
See Article on Publisher Site

Abstract

Suppose that a strong and a weak operator compete in a telecommunications market. To terminate a call operators need access to the competitor’s network if the call is off-net. Operators set two-part tariffs and price-discriminate according to termination of a call. Suppose as a benchmark that access prices are regulated at costs. I show that the weak operator’s profit and consumer welfare increase if the regulator sets a higher price to access the weak operator’s network. However, total surplus decreases even locally.

Journal

Journal of Regulatory EconomicsSpringer Journals

Published: Aug 2, 2005

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