Regulation of new markets in telecommunications? Market dynamics and shrinking monopolistic bottlenecks

Charles Blankart, Günter Knieps and Patrick Zenhäusern

No 112 [rev.], Discussion Papers from University of Freiburg, Institute for Transport Economics and Regional Policy

Abstract: This paper aims at localizing network-specific market power in new markets. Three kinds of transmission qualities on service markets can be differentiated according to the products provided: narrowband services like PSTN/ISDN or GSM, semi high-speed broadband services like broadband internet access up to 6 Mbps download and VDSL services up to 50 Mbps. As long as, due to the absence of alternative network infrastructures, a monopolistic bottleneck in local infrastructure networks exists the question arises what the remaining bottleneck components are for these different markets. In this paper the shrinking-bottleneck hypothesis will be demonstrated.

Date: 2007
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