Infrastructure-Based Versus Service-Based: Competition In Telecommunications

Jörg Lundborg, Martin Lundborg and Ernst-Olav Lundborg

MPRA Paper from University Library of Munich, Germany

Abstract: Unbundling of the local loop (ULL) has seen quite different "success stories" in the various countries across Europe. Although the obligation for the provision of ULL was implemented in the regulatory framework early and mostly parallel to other means of liberalisation, national implementation has been rather heterogeneous. One question of decisive importance for national regulatory authorities (NRAs) was whether to foster service-based competition in the first phase of liberalisation or to focus on infrastructurebased competition. The different NRAs chose to head down different roads. This paper analyses whether the strategy of NRAs has had any mid-term effect on the economic welfare created in the communications markets. It indicates that infrastructure-based competition has a positive effect on innovation. Moreover, infrastructure-based competition appears to be more important for business customers than for residential clients. On the other hand, service-based competition lowers call prices and appears to be more important to residential markets. The results of this study point out the importance of a balanced approach to both types of policies.

Keywords: competition; telecommunication; ladder of infrastructure; ladder of investement; regulatory policies (search for similar items in EconPapers)
JEL-codes: D43 L41 L43 L51 L96 (search for similar items in EconPapers)
Date: 2006-12
New Economics Papers: this item is included in nep-com, nep-mic and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Published in International Journal of Digital Economics 64 (2007): pp. 67-87

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:3571

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