Access pricing: A comparison between full deregulation and two alternative instruments of access price regulation, cost-based and retail-minus

Paula Sarmento and Antonio Brandao

Telecommunications Policy, 2007, vol. 31, issue 5, 236-250

Abstract: In this paper, two instruments of access price regulation, cost-based and retail-minus, are compared with the full deregulation hypothesis. For this purpose, a model that considers an upstream monopolist firm that sells a vital input to an independent firm and to a subsidiary firm in the downstream market is developed. The main conclusion of the paper is that retail-minus regulation avoids foreclosure and leads to better results than cost-based regulation in terms of investment level and consumer surplus. Moreover, retail-minus regulation allows a higher consumer surplus than deregulation of access price as long as the regulator carefully defines the retail-minus instrument.

Keywords: Access; regulation; Vertical; integration; Retail-minus (search for similar items in EconPapers)
Date: 2007
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Citations: View citations in EconPapers (14)

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Working Paper: Access Pricing: A Comparison Between Full Deregulation and Two Alternative Instruments of Access Price Regulation, Cost-Based and Retail-Minus (2006)
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