Regulation of network industries in the European Union and in Central and Eastern Europe

Cost-based pricing has dominated the regulatory regime of network industries - and first of all, the regulation of the infocommunications sector - in the European Union since the early 1990s. When privatization of network industries began in Central and Eastern Europe (CEE), one of the main stumbling blocks on the road toward privately owned telecomm companies and postal services, energy producers and distributors, and other network industries was the lack of efficient and up-to-date industry regulations. From the mid-1990s, accessing countries that later became members of the EU, and other CEE countries that are still waiting for admission swiftly adopted the regulatory framework of the European Union. The EU has been striving for market opening and liberalization in these industries; it abolished industry regulation in several segments of the market of network industries. Now it applies so-called cost-based pricing in areas where regulation is still in place. CEE countries now use the same type of regulation as the advanced member states of the EU. But the regulatory capacity of most CEE countries is still far behind of their West European counterparts. Experts of network industries advocate, and telecommunications, energy and other market regulators in various parts of the world practice, cost-based pricing for inter-firm network access services. Cost-based pricing is carried out under the assumption that the regulator has perfect information regarding the costs of producing the services. We show in this paper that - under fairly general conditions - cost-based pricing creates incentives for regulated firms not to improve their efficiency. We also show that cost-based pricing results in smaller consumer welfare than incentive regulation that takes into account the existence of information asymmetry between the regulator and the firm. A model of interconnection with adverse selection and moral hazard is presented. --network industries,regulation,incentive contracts

Optimized IP-CANs to support best charged IMS scenarios

conference paper Published in Personal, Indoor and Mobile Radio Communications, 2009 IEEE 20th International Symposium by IEEE.The pricing and charging mechanisms used in Next Generation Network (NGN) deployments will influence the profitability of network operators. NGNs present an opportunity for the success of service delivery platforms designed for IP multimedia communications, like the IP Multimedia Subsystem (IMS). Moreover, they present a platform for the delivery of a multitude of applications and services to users with different expectations and budgets. Although usage-based charging schemes are more meaningful, some recent successful Internet-based applications and services have attracted widespread usage due to enforcement of flat-rate pricing. The choice of a pricing scheme often has a one-to-one relation to the access network technology and the quality of service guarantee. Flat-rate pricing may easily be associated with best effort transport. This implies that some users opt for services without QoS guarantee when favoured by the pricing methodology. This paper explores scenarios where services with different QoS requirements available to users with varying pricing preferences can be provided over a set of IP connection access networks (IP-CANs) of the IMS.We explore the use of different pricing schemes for different IP-CANs of the IMS. We perform testbed evaluations and present results depicting the income patterns of networks enforcing different pricing and charging schemes for VoIP and IPTV services. Moreover, we emphasize the use of simplified pricing schemes on communication networks.The pricing and charging mechanisms used in Next Generation Network (NGN) deployments will influence the profitability of network operators. NGNs present an opportunity for the success of service delivery platforms designed for IP multimedia communications, like the IP Multimedia Subsystem (IMS). Moreover, they present a platform for the delivery of a multitude of applications and services to users with different expectations and budgets. Although usage-based charging schemes are more meaningful, some recent successful Internet-based applications and services have attracted widespread usage due to enforcement of flat-rate pricing. The choice of a pricing scheme often has a one-to-one relation to the access network technology and the quality of service guarantee. Flat-rate pricing may easily be associated with best effort transport. This implies that some users opt for services without QoS guarantee when favoured by the pricing methodology. This paper explores scenarios where services with different QoS requirements available to users with varying pricing preferences can be provided over a set of IP connection access networks (IP-CANs) of the IMS.We explore the use of different pricing schemes for different IP-CANs of the IMS. We perform testbed evaluations and present results depicting the income patterns of networks enforcing different pricing and charging schemes for VoIP and IPTV services. Moreover, we emphasize the use of simplified pricing schemes on communication networks

Equilibrium Market and Pricing Structures in Virtual Platform Duopoly

We investigate the equilibrium market sturcture in virtual platform duopoly (auctions or other market forms) that are prevalent in internet settings. We take full account of the complexity of network effects in such markets and determine optimal pricing strategies. We invstigate the welfare implications of such strategies, look at the impact of non-exclusive services and at what happens in large markets.Two-sided Markets; Duopoly Pricing;

An Efficient Mechanism for Differentiated Quality of Internet Service

The Internet industry has realized the importance of provisioning different quality of service to different applications. This paper proposes the integrated differentiated services that achieves the efficient throughput allocation without significant queue management or real-time pricing costs. Competing differentiated services integrates networks into a single network in an economy and allows endusers to submit packets to many networks. In equilibrium, each network posts any price for a submitted packet over time by virtue of the revenue equivalence property.

A Brief History of Mobile Telecommunication in Europe

Since the introduction of mobile telephony in the early fifties in Europe, US and Japan the demand for this service exploded. It seems that the latent demand for mobile telecommunication services for decade's continued to be very strong. Since the introduction of cellular technology the capacity of the services increasingly became able to meet the massive demand. Next and future generations of mobile telecommunication technologies bring increased transmission speed and more versatile services. This forces network operators to organise multi- sourced information flows supplied by service providers to increase the network effect of the system instead of providing the network infrastructure and leave the content to the users as in pure voice telephony. The drivers and inhibitors behind the emergence and recent developments of mobile telecommunications systems in Europe are highlighted in this paper. Liberalisation of the telecom markets in Europe drove new entrants to the market and curbed excessive pricing. However, in recent years the lack of challenging service is the main cause for the wavering development of newer generations of mobile telecommunication services.Telecommunications, Market Structure, Production, Pricing, Technological Change, Economic History, Europe