Andres Hervas-Drane ()
Additional contact information
Andres Hervas-Drane: IESE Business School, Postal: Research Division, Av Pearson 21, 08034 Barcelona, SPAIN
Abstract: I present a vertical differentiation model to assess the quality-wise strategy of an incumbent telecommunications operator under open access regimes. I show that it is always profitable for an incumbent subject to wholesale regulation to degrade wholesale quality in a non-recoverable fashion. The findings are robust to the number of competitors and the price cap level, unlike those predicted by the cost-raising discrimination paradigm. I also show that functional separation, a structural remedy aimed at separating the incumbent's wholesale and retail operations, better aligns supply-side incentives with those of consumers. The analysis suggests that structural remedies exhibit good properties to implement open access regimes.
Keywords: Broadband Regulation; Open Access; Quality Service; Discrimination
JEL-codes: D42; L12; L15; L22; L42; L96
27 pages, November 11, 2011
Full text files
DI-0942-E.pdf
Questions (including download problems) about the papers in this series should be directed to Noelia Romero ()
Report other problems with accessing this service to Sune Karlsson ().
This page generated on 2024-02-05 15:47:30.