Network-Based Price Discrimination and `Bill-and-Keep' vs. `Cost-Based' Regulation of Mobile Termination Rates

Harbord, David; Pagnozzi, Marco

doi:10.2202/1446-9022.1196

Cited by 40 publications

(17 citation statements)

References 47 publications

(102 reference statements)

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“…We believe the extension to call externalities to be important as it has been argued (e.g. Harbord and Pagnozzi [2010], Harbord and Hoernig [2010]) that if the call externality is very strong, so that people enjoy receiving calls as much as placing calls (or even more, since receiving calls is usually free of charge in Europe) reducing MTRs may be bene…cial both to …rms and to consumers, despite the reduction in handset subsidies, simply because consumers will receive much more calls when MTRs and, as a consequence, retail prices are reduced.…”

Section: Introductionmentioning

confidence: 78%

The welfare effects of mobile termination rate regulation in asymmetric oligopolies: The case of Spain

Hurkens

López

2012

Telecommunications Policy

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Section: Introductionmentioning

confidence: 78%

The welfare effects of mobile termination rate regulation in asymmetric oligopolies: The case of Spain

Hurkens

López

2012

Telecommunications Policy

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“…The extant literature argues that on-net/off-net differentiation unfolds anti-competitive effects due to tariff-mediated network effects which benefit large network operators and harm smaller entrants or even prevent entry altogether (Harbord and Pagnozzi 2010). While these results critically hinge on consumers behaving fully rational, evidence from both empirical and experimental studies on consumers' tariff choice suggests that not all consumers are capable of choosing their tariff fully rationally (Claussen, Türg, and Zucchini 2012;.…”

Section: Discussionmentioning

confidence: 99%

The Effect of On-Net/Off-Net Differentiation and Heterogeneous Consumers on Network Size in Mobile Telecommunications - an Agent-Based Approach

Muck

2013

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractI explore the effects of on-net / off-net differentiation on network sizes in mobile telecommunications when both rational and non-rational consumers coexist in the market. In particular, three different types of consumers are modeled: (1) fully informed rational (FIR) consumers who are perfectly informed about the true market shares of all networks and choose the network with the lowest expected cost of a call; (2) partly informed rational (PIR) consumers who only observe market shares within a circular sensing field and choose the network with the lowest expected cost of a call based on these observed market shares; and (3) non-rational (NR) consumers who choose the network with the highest market share among their immediate neighbors. Using an agent-based simulation approach and by systematical variation of four key parameters of the model, three key results emerge. First, if the share of FIR consumers is too high, all consumers will eventually join the initially larger network A. Second, if their share in the population is sufficiently large, NR consumers can prevent the growth of clusters of consumers subscribed to network B. Third, if the share of PIR consumers is high, clusters of consumers subscribed to network B can grow, thereby increasing network B's market share, provided that the radius of their circular sensing field is small enough for the cluster size.

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“…While the existence of termination monopolies is widely acknowledged in the literature (surveyed by VOGELSANG 2003, LITTLECHILD 2006and HARBORD and PAGNOZZI 2010, its effects and the remedies have been quite contentious.…”

Section: Theoretical and Empirical Literature About Policiesmentioning

confidence: 99%

“…The position of researchers finding efficient termination charge levels above costs is fundamentally challenged by the observation that the utility of both the calling and receiving party is positively affected by a successful call (HARBORD and PAGNOZZI 2010). In particular, DEGRABA (2000,2002,2003) argues that when both caller and receiver benefit from a call they should share its costs in proportion to the benefits that they receive.…”

Section: What Is the Efficient Price Level?mentioning

confidence: 99%

The Endgame of Telecommunications Policy? A Survey

Vogelsang

2013

Review of Economics

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Telecommunications policy has come a long way from regulation of vertically integrated monopolies to the current state of competition. As competition becomes selfsustainable, will telecommunications policy in the form of industry-specific regulation go away or, if not, what form will it take? The economics literature suggests that the regulatory efficiency frontier is shifted by new technological and market developments, such as convergence of networks, fixed-mobile substitution (and integration) and next generation access networks. The frontier is also affected by the existing capital stock and other physical and institutional characteristics of a country. The insights from a review of the theoretical and empirical literature are applied to five policy areas. They are: (1) termination monopoly; (2) local bottleneck access; (3) net neutrality; (4) spectrum management; and (5) universal service. While in some of them, deregulation and a move to competition policy will soon be the efficient state of the art, regulation will remain efficient in others for some time. Deregulation will likely become efficient for one-way access and universal service, with the exception of some universal service policies in remote areas and for the poor. Termination will move to bill and keep with a duty to interconnect. In addition, some (more symmetric) regulation should persist for net neutrality in the form of transparency requirements, (quasi-) common carrier obligations and minimum quality standards. Also, spectrum management, while moving towards full-blown ownership rights, will continue to see regulators providing zoning and other services, particularly for unlicensed spectrum. All these assessments are premised on the success of making additional spectrum as the key resource available. They are also premised on the absence of a killer technology like P2P FTTH that potentially dominates all other technologies. What determines the endgame in telecommunications regulation? Although technical and market developments will dominantly shape the regulatory efficiency frontier, institutional and political economy factors have an additional and mostly slowing effect on policy changes. (JEL: L43; L86; L96; L98.

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Network-Based Price Discrimination and `Bill-and-Keep' vs. `Cost-Based' Regulation of Mobile Termination Rates

Cited by 40 publications

References 47 publications

The welfare effects of mobile termination rate regulation in asymmetric oligopolies: The case of Spain

The welfare effects of mobile termination rate regulation in asymmetric oligopolies: The case of Spain

The Effect of On-Net/Off-Net Differentiation and Heterogeneous Consumers on Network Size in Mobile Telecommunications - an Agent-Based Approach

The Endgame of Telecommunications Policy? A Survey

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