International network competition under national regulation
Tangerås, Thomas P. and Tåg, Joacim LU
(2016)
In International Journal of Industrial Organization
47.
p.152-185
- Abstract
We extend the workhorse model of network competition to international calls. This model enables us to show that national regulatory authorities (NRAs) maximizing domestic welfare have incentives to increase termination rates above the social optimum to extract rent from international call termination. Excessive termination rates distort prices but transfer surplus from foreign to domestic consumers via intensified network competition. The model can explain the regulation of termination rates through rate floors. International network ownership and deregulation are alternatives to combat the incentives of NRAs to distort termination rates. We identify conditions under which each of these policies increases aggregate welfare.
Please use this url to cite or link to this publication:
https://lup.lub.lu.se/record/cfdd1168-2780-4ebc-be04-2fdaab948993
- author
- Tangerås, Thomas P.
and Tåg, Joacim
LU
- publishing date
- 2016-07-01
- type
- Contribution to journal
- publication status
- published
- subject
- keywords
- Conglomerate merger, International markets, National regulation, Network competition, Telecommunications, Termination rates
- in
- International Journal of Industrial Organization
- volume
- 47
- pages
- 34 pages
- publisher
- Elsevier
- external identifiers
-
- scopus:84970027648
- ISSN
- 0167-7187
- DOI
- 10.1016/j.ijindorg.2016.04.006
- language
- English
- LU publication?
- no
- id
- cfdd1168-2780-4ebc-be04-2fdaab948993
- date added to LUP
- 2020-01-23 15:55:12
- date last changed
- 2022-02-01 03:09:06
@article{cfdd1168-2780-4ebc-be04-2fdaab948993,
abstract = {{<p>We extend the workhorse model of network competition to international calls. This model enables us to show that national regulatory authorities (NRAs) maximizing domestic welfare have incentives to increase termination rates above the social optimum to extract rent from international call termination. Excessive termination rates distort prices but transfer surplus from foreign to domestic consumers via intensified network competition. The model can explain the regulation of termination rates through rate floors. International network ownership and deregulation are alternatives to combat the incentives of NRAs to distort termination rates. We identify conditions under which each of these policies increases aggregate welfare.</p>}},
author = {{Tangerås, Thomas P. and Tåg, Joacim}},
issn = {{0167-7187}},
keywords = {{Conglomerate merger; International markets; National regulation; Network competition; Telecommunications; Termination rates}},
language = {{eng}},
month = {{07}},
pages = {{152--185}},
publisher = {{Elsevier}},
series = {{International Journal of Industrial Organization}},
title = {{International network competition under national regulation}},
url = {{http://dx.doi.org/10.1016/j.ijindorg.2016.04.006}},
doi = {{10.1016/j.ijindorg.2016.04.006}},
volume = {{47}},
year = {{2016}},
}