Abstract:
One of the most difficult challenges for infrastructure regulation is to preserve competition in non-monopoly markets integrated to networks that may be regarded as essential facilities and which create strong incentives to incumbents to impose vertical restraints to competition. Telecommunications services in Brazil are a case in point: its institutional model stimulated the introduction of competition but did not adopt vertical structural separation. Local and regional carriers owning local networks have been carrying out a variety of discriminatory practices, usually under interconnection regulated maximum prices. Unless the regulatory agency- ANATEL- acts promptly to prohibit such practices, concentration levels and entry deterrence in potentially competitive markets will strongly increase. Together with the local carriers' virtual monopolies, so difficult to eliminate, such trend will probably determine the failure of regulatory policy to introduce effective competition in fixed telephony in Brazil.
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