A Regulatory Framework for New and Emerging Markets

COMMUNICATIONS & STRATEGIES is an international journal that aims to publish peer-reviewed papers focusing on the industry's key issues and offering a forum for the finest socio-economic analysis of the telecoms, IT and audiovisual sectors. www.comstrat.org

24 Pages Posted: 9 Apr 2007

See all articles by Pio Baake

Pio Baake

German Institute for Economic Research (DIW Berlin)

Ulrich Kamecke

Humboldt University of Berlin - Faculty of Economics

Christian Wey

University of Düsseldorf - Düsseldorf Institute for Competition Economics (DICE)

Abstract

The future of the information society crucially depends on investments in upgrading existing infrastructures and building new networks. Traditional cost-based regulation, which focuses on issues of static efficiency and service-based competition necessarily has negative effects on innovation incentives and the emergence of infrastructure-based competition in the highly dynamic telecommunications industry. This paper presents a regulatory framework for new infrastructures, which makes ex ante regulation contingent to the tendency towards effective competitive structures. Unlike the standard Significant Market Power-test (SMP), this approach takes a longer term perspective and therefore secures operators' investment incentives. The proposal has several desirable incentive effects. Firstly, it counters incentives to free-ride on investments by potential competitors, and secondly, it makes preemptive and other predatory practices by the investing firm less attractive. As a result, our proposal of contingent regulation in emerging markets promotes infrastructure-based competition in telecommunications.

Keywords: new markets, infrastructure investments, regulation

JEL Classification: L96,L90,K23,L43

Suggested Citation

Baake, Pio and Kamecke, Ulrich and Wey, Christian, A Regulatory Framework for New and Emerging Markets. COMMUNICATIONS & STRATEGIES is an international journal that aims to publish peer-reviewed papers focusing on the industry's key issues and offering a forum for the finest socio-economic analysis of the telecoms, IT and audiovisual sectors. www.comstrat.org, Available at SSRN: https://ssrn.com/abstract=978730

Pio Baake (Contact Author)

German Institute for Economic Research (DIW Berlin) ( email )

Mohrenstraße 58
Berlin, 10117
Germany

Ulrich Kamecke

Humboldt University of Berlin - Faculty of Economics ( email )

Spandauer Strasse 1
D-10178 Berlin
Germany
(49)-(30)-2093 5785 (Phone)
(49)-(39)-2093 5787 (Fax)

Christian Wey

University of Düsseldorf - Düsseldorf Institute for Competition Economics (DICE) ( email )

Universitaetsstr. 1
Duesseldorf, NRW 40225
Germany
+49-211-81-15009 (Phone)
+49-211-81-15499 (Fax)

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
303
Abstract Views
1,896
rank
122,210
PlumX Metrics