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By Martin Peitz, Toker Doganoglu and Jel-classi…cation L


In liberalized telecommunications markets, the incumbent typically enjoys several advantages over any entrant. Regulation in such asymmetric markets is successful if retail prices are low and the entrant’s pro…ts are high so that entry is encouraged. I show that asymmetric access price regulation with a cost-based access price for the incumbent and an access markup for the entrant is more successful than cost-based access price regulation applied to incumbent and entrant. This is a robust prediction, in particular with respect to the pricing strategies considered. Such asymmetric access price regulation is in accordance with European legislation. [96 words

Topics: access price, regulation, telecommunications, interconnection
Year: 2001
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