Network-Based Price Discrimination and `Bill-and-Keep' vs. `Cost-Based' Regulation of Mobile Termination Rates

David Harbord and Marco Pagnozzi

Review of Network Economics, 2010, vol. 9, issue 1, 46

Abstract: This paper surveys the recent literature on competition between mobile networks in the presence of call externalities and network effects. It argues that the regulation of mobile termination rates based on fully allocated costs, or "long-run incremental cost plus," exacerbates the network effects associated with "tariff-mediated network externalities," by increasing mobile networks' on-net/off-net price differentials. This reduces welfare and acts as a barrier to growth for smaller networks and new entrants. The paper argues for the adoption of "bill-and-keep" for mobile termination rates, and responds to recent theoretical arguments which suggest that such a move might harm mobile subscribers.

Keywords: mobile termination rates; regulation; bill-and-keep; call externalities; network effects (search for similar items in EconPapers)
Date: 2010
References: Add references at CitEc
Citations: View citations in EconPapers (45)

Downloads: (external link)
https://doi.org/10.2202/1446-9022.1196 (text/html)
For access to full text, subscription to the journal or payment for the individual article is required.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bpj:rneart:v:9:y:2010:i:1:n:1

Ordering information: This journal article can be ordered from
https://www.degruyter.com/journal/key/rne/html

DOI: 10.2202/1446-9022.1196

Access Statistics for this article

Review of Network Economics is currently edited by Lukasz Grzybowski

More articles in Review of Network Economics from De Gruyter
Bibliographic data for series maintained by Peter Golla ().