Long Live OPTA!

Abstract

Although explicitly installed as a transitory body, the Dutch telecommunication controller OPTA displays the typical signs of government institutions that seek to become indispensable. A conflict in OPTA''s two main policy objectives – guarding consumer prices through controlling the network operator and encouraging entry into the telecommunication market – hinders OPTA in making itself redundant. It is shown that a market structure with a dominant owner of the network and a few fringe firms, among which OPTA referees for ever, is a stable Nash equilibrium. Some possible remedies for this undesirable state of affairs are discussed. Long live OPTA, but leaner and meaner, supervising a symmetrically competing market.Economics ;