Laurent Flochel

Universal service obligations and competition

Abstract We provide some elements to assess and compare various regulatory rules for the allocation and funding of universal service obligations (USOs). We restrict ourselves to ubiquity and spatial non discrimination constraints. We examine the welfare consequences of two systems: First, a regulation where USOs are imposed only on the incumbent firm (restricted-entry regulation) and second, a ‘pay or play’ rule where the entrant may serve non profitable users. Whereas pay or play regulation dominates when only the ubiquity constraint is at work, this result no longer holds when non discrimination is added.

Competition and mergers in networks with call externalities

This paper considers a model of two interconnected networks with different qualities. There are call externalities in the sense that consumers value calls they send and receive. Networks compete in two part tariffs. We show that call externalities create private incentives for each competitor to charge low access prices. This result moderates the risk of tacit collusion when competitors can freely negotiate their access charges. We also analyze the case of a merger between the two networks and give conditions under which the merger can be welfare improving.

Competition in Networks with Call Externalities

This paper considers a model of two interconnected networks with different qualities. There are call externalities in the sense that consumers value calls they send and receive. Networks compete in two part tariffs. We show that call externalities create private incentives for each competitor to charge low access prices. This result moderates the risk of tacit collusion when competitors can freely negotiate their access charges.