By Ralf Dewenter, Justus Haucap
Entry to crucial amenities or so-called bottlenecks has turn into the most important public coverage factor for the liberalization of community industries akin to telecommunications, electrical energy, rail etc. nonetheless, entry costs usually are not in simple terms vital for festival in previously monopolistic industries, but in addition for industries the place pageant has lengthy been confirmed reminiscent of fee and bank card networks or cellular telecommunications. because the latter industries have additionally come lower than nearer scrutiny by means of regulatory corporations and pageant professionals, this e-book is devoted to the research of entry pricing in conception and perform. The constitution of this publication that is geared up in 5 components is as follows: The prolonged creation will introduce the foremost innovations and matters together with a short clarification of the basic facility suggestion in addition to the excellence among one-way and two-way entry and may in brief survey the most contributions in the literature on entry pricing thought and perform. whereas elements I and II care for the idea of one-way and two-way entry pricing, respectively, half III makes a speciality of the newly rising concept of entry pricing with multihoming. elements IV and V handle the perform part and concentrate on industry-specific functions and designated difficulties (Part IV) in addition to public coverage concerns (Part V). This e-book presents useful theoretical and empirical analyses in entry Pricing and similar issues. It deals numerous varied issues of view. It gains study from hugely reputed scientists operating during this box.
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Extra info for Access Pricing: Theory and Practice
A monopolist may be allowed to set its access prices within a global price cap which includes both access and retail prices (see Laffont and Tirole, 2000). If the monopolist chooses a high access price, downstream prices have to be relatively low. If, in contrast, the access price is set at a relatively low level, prices for services in downstream markets set by the monopolist may be rather high. Now, however, competitors can set lower prices as the monopolist’s access prices have to be low. While the incentives for foreclosure are reduced, there is still an incentive to prevent entry in upstream markets if downstream price discrimination is allowed and possible.
Chapter 1 – Access Pricing: An Introduction 33 The authors recommend to first leave new markets unregulated for a period of four years in order to protect investment and innovation incentives. After that period a modified SSNIP (small but significant and non-temporary increase in price) test is proposed to test for the existence of a separate new market. If a separate new market does exist, the authors suggest that regulatory authorities analyze whether there is a tendency towards competition. More exactly, it is recommended that, after six years, regulatory bodies should analyze whether or not there is competing infrastructure, after eight years, regulators should analyze whether or not competitors have gained significant market shares; and after ten years, it should be examined whether the market is characterized by non-temporary significant market power.
In summary, the question whether or not MNOs are likely to voluntarily grant MVNOs access to their networks strongly depends on factors such as market size, market structure, market conduct, fixed cost, product differentiation, and the share of profits an MNO is able to extract from an MVNO entrant. 2 Policy Part V consists of three chapters. First, Alexandre de Streel (Chapter 12) provides an analysis of the relationship between European competition policy and national sector-specific regulation.