Article Abstract:
Research was conducted to analyze the optimal design of access tariffs when downstream competition is not regulated but imperfect and under the condition of uncertainty regarding an unregulated competitor's production costs. Results demonstrate that the regulator subsidizes the rival's access; the rival firm makes higher production costs when it receives a smaller subsidy; the downstream competition gets more intense when the extent to which the regulator favors one supplier is less pronounced; the regulator tends to induce the rival firm to divulge its private costs.
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Article Abstract:
Regulatory reforms are needed in telecommunications to address changes brought about by technological advances and increased competition. However, such reforms must be made in accordance with the principles of market competition. They must also support the efficient use of and investment in infrastructure. It is argued that reform should be based on regulatory symmetry. Proper and timely regulation of competition is also needed to safeguard efficient entry and investment in telecommunications.
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Article Abstract:
A model is developed to determine the effects of input price regulation in the telecommunications industry when a vertically integrated firm controls an input. Results show that the effects of input price regulation on competition depend on regulated input price. The rising of input prices that are below a threshold makes vertically integrated firms less concerned about payoffs from the retail sector and forces competitors to reduce their prices.
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