Access by Capacity and Peak-Load Pricing

Several European telecommunications regulatory agencies have recently introduced a fixed capacity charge (flat rate) to regulate access to the incumbents network. The purpose of this paper is to show that the optimal capacity charge and the optimal access-minute charge analysed by Armstrong, Doyle, and Vickers (1996) have a similar structure and imply the same payment for the entrant. I extend the analysis to the case where there is a competitor with market power. In this case, the optimal capacity charge should be modified to avoid that the entrant cream-skims the market, fixing a longer or a shorter peak period than the optimal. Finally, I consider a multiproduct setting, where the effect of the product differentiation is exacerbated.peak-load pricing, network regulation, telecommunications, access pricing, capacity charge

Urban transport governance reform in Barcelona

The unusual mixed public-private structure of the urban bus market in the metropolitan area of Barcelona provides an interesting context in which to analyze the management challenges and opportunities of the partial privatization of public services. Initiatives used by the public regulator to promote competition for contracts, such as short term concessions to private contractors and the removal of entry barriers, have considerable potential for improving efficiency and quality. The growth in the share of routes managed by private firms in recent years shows that privatization is a credible threat that may well stimulate improved performance among public managers. The type of reform implemented in Barcelona is of interest to all metropolitan areas large enough to operate under constant returns to scale regimes, and suitable for potential concessions of routes in segregated areas inside the metropolitan area, so as not to miss out on the benefits of economies of density.Privatization, mixed public-private, regulation, competition JEL classification:

Worksharing and access discounts in the postal sector with asymmetrics information

This paper analyses the optimal worksharing discount granted to mailers and entrants in a liberalized postal sector when there is asymmetric information about the Post Offices costs. When the regulator is unable to ascertain which part of the total cost of sorting has to be attributed to each sorting facility, the optimal access discount given to the entrants is set in a procompetitive way, thus facilitating the entry of firms that are less efficient than the Post Office. However, with the same asymmetry of information, the optimal worksharing discount given to the mailers is set to favor the Post Office, even when it is less efficient than the mailers in providing the sorting.postal sector, worksharing discounts, competition, access pricing

Net Neutrality in a Hyperlinked Internet Economy

In this paper, we study the welfare implications of the zero-price rule of the Net Neutrality (NN) regulation in an economy where two competing Content Providers (CPs) can engage in interlinking agreements. When CPs link their contents, they attract indirect visitors who first visit one CP and then the other so as to benefit from the complementarities of their products. We show that CPs are interested in reaching a linking agreement when the termination fee set by the Internet Service Provider (ISP) is not particularly high. The ISP may also find it profitable to set a low termination fee that leads CPs to reach a linking agreement. First, it benefits from the increase in the Internet traffic, provided that its cost of transmitting content is not too high. And second, the links increase the consumers' willingness to pay for the service, which allows it to set a higher subscription fee. Last, we show the cases in which the regulation of the termination fee can increase social welfare. We also point out that when the ISP's transmission cost is sufficiently low the imposition of the NN principle is justifiable, although this is a sufficient, but not a necessary, policy intervention for welfare maximization

Pricing strategies and competition in the mobile broadband market

This paper analyzes mobile broadband plan prices in 37 countries between 2011 and 2014. Mobile network operators typically commercialize usage-based plans that include an access fee, a usage allowance (number of GB included in the tariff plan), and a penalty system should consumers exceed the contracted allowance. Our empirical model shows that the prices of these plans are lower than those of unlimited contracts, and that they depend on the type of penalty that is used. The prices also reflect service characteristics, including the technology provided, the download speed, and telephone call allowances. Plans that bundle mobile broadband plans with smartphone devices have longer contract duration and may be more expensive than plans that only include a SIM card. Specifically, broadband service plans are priced higher when they include an iPhone or a Samsung smartphone. The paper also discusses the impact of market structure and entry regulation on prices

The interconnection prices in telecomunications: from theory to practice

This paper evaluates the main measures that have been used to regulate the interconnection prices in the telecommunication sector. We show that many of the regulations that are applying the vast majority of countries have very little theoretical support, and we identify the restrictions that prevent a more efficient intervention in the sector. In order to conduct this research, we firstly review the results of the theoretical literature on one and two-ways interconnections and we explain the problems that the national regulatory agencies have had when introducing the lessons of the academic contributions in their regulations. Secondly, we analyse the cost orientated interconnection prices, which are at present the regulatory practices most widely used. We evaluate the efficiency of some versions of this mechanism and explain the efforts that are being made to improve it.Telecommunications, regulation, interconnection, access charges

La liberalización de las telecomunicaciones en España: objetivos europeos versus intereses nacionales

Este artículo analiza la liberalización de las telecomunicaciones en España en el período 1987-2003. Nuestra hipótesis principal es que aunque la liberalización vino impuesta por las autoridades europeas, el ritmo y la estrategia aplicados estuvieron influenciados en gran parte por dos objetivos de política económica nacional: la universalización del servicio y la política antiinflacionista orientada a la entrada en la Unión Monetaria Europea (UME). ..

Broadband prices in the European Union : competition and commercial strategies

This paper analyses the determinants of broadband Internet access prices in a group of 15 EU countries between 2008 and 2011. Using a rich panel dataset of broadband plans, we show the positive effect of downstream speed on prices, and report that cable and fibre-to-the-home technologies are available at lower prices per Mbps than x DSL technology. Operators’marketing strategies are also analysed as we show how much prices rise when the broadband service is offered in a bundle with voice telephony and/or television, and how much they fall when download volume caps are included. The most insightful results of this study are provided by a group of metrics that represent the situation of competition and entry patterns in the broadband market. We show that consumer segmentation positively affects prices. On the other hand, broadband prices are higher in countries where entrants make greater use of bitstream access and lower when they use more intensively direct access -local loop unbundling-. However, we do not find a significant effect of inter-platform competition on prices

Competencia en el mercado de banda ancha móvil en España

En los últimos años el servicio de banda ancha móvil ha tenido una fuerte expansión en España, hasta alcanzar una penetración de más del 70 por 100 de la población a principios de 2014. Este crecimiento puede explicarse por las prestaciones que ofrecen las tecnologías de tercera y cuarta generación en los terminales móviles actuales, y por las continuas reducciones de precios del servicio. A pesar de ello, los precios en España son todavía más altos que la media europea. Este artículo explica el proceso de innovación tecnológica que ha permitido el surgimiento de la banda ancha móvil, y su lanzamiento en España. Se examinan las nuevas estrategias comerciales que utilizan los operadores, como el empaquetamiento de servicios y los planes convergentes que incluyen servicios fijos y móviles. Nuestro análisis destaca que la presencia de los operadores móviles virtuales y el empaquetamiento han favorecido la competencia y la disminución de precios. También mostramos cómo la convergencia tecnológica entre los servicios fijos y móviles promueve la restructuración y concentración del mercado

Airport dominance, route network design and flight delays

Airlines with a dominant position at the destination airports have little competitive pressure to reduce delays, but they might care about the negative effects that delays generate on their own flights. Using detailed daily flight data for six Spanish airports in 2017-2018 including very precise information on the external factors that generate flight delays, we find that flights operated by network airlines (i.e., airlines that operate a hub-and-spoke network) with a large presence at the destination airports have less delays than flights operated by other airlines. This finding is in line with the literature on congestion internalization, which predicts a negative relationship between airlines' dominance at the destination airports and delays. We also show that flights operated by low-cost airlines (i.e. airlines that operate a point-to-point network) with a dominant presence at destination airports are more likely to exhibit delays. This result could be explained by the route configuration of low-cost airlines and by their relative low number of connecting passengers