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Author: | Bourreau, M. Dogan, P. |
Title: | Unbundling the local loop |
Journal: | European Economic Review
2005 : JAN, VOL. 49:1, p. 173-199 |
Index terms: | Infrastructures Technology transfer Regulations |
Language: | eng |
Abstract: | The authors study competition for high bandwidth services in the telecommunications industry by introducing the possibility of unbundling the local loop, where leased lines permit the entrant to provide services without building up its own infrastructure. They show that the incumbent sets to low a rental price for its loops, hence, the entrant adopts the new technology too late from a social welfare perspective. They also show that while regulating the rental price may suffice to achieve socially desirable outcomes, a sunset clause does not improve social welfare. |
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