DP8399 Asymmetric Broadband Wholesale Regulation

Author(s): Steffen Hoernig
Publication Date: May 2011
Keyword(s): Access regulation, Cable, Convergence, Copper
JEL(s): L51, L96
Programme Areas: Industrial Organization
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=8399

Due to technological convergence, multiple infrastructures can now offer broadband or triple-play services, while the existing access regulation is based on a single essential network. We show that continued asymmetric access regulation of one network does not control sufficiently for market power and benefits the unregulated network, and that symmetric regulation would lead to higher consumer surplus. Furthermore, the whole setup of access regulation may not be viable in the long run if regulatory constraints provide strong first-mover advantages to the unregulated network.