The Measure and Regulation of Competition in Telecommunications Markets
CIRANO Working Paper No. 2005s-35
41 Pages Posted: 2 Jan 2006
Date Written: November 2005
I claim that the urgently needed telecommunications regulatory reform must rest on three specific principles or policies for enhancing economic efficiency. First, the pursuit of a dynamic regulatory approach based on implementing proper competition processes and information systems rather than based on the traditional measurement of market shares and concentration ratios, which, in a changing and volatile industry, typically become obsolete at the time they are completed. Second, the promotion of competition through the determination of proper incentives for the deployment of dynamically efficient network inter-access pricing rules and conditions and for the implementation of efficient investment programmes to guarantee the integrity of the telecommunications networks in Canada. Third, the design of non predatory pricing rules (price floors) through full cost sharing capable of fostering the emergence of a more competitive telecommunications industry, even if such non predatory pricing rules is likely to imply some loss of static efficiency.
Keywords: Competition, Regulation, Telecommunications, Full cost sharing
JEL Classification: L13, L51, L96, C71
Suggested Citation: Suggested Citation