Paul de Bijl

Local Loop Unbundling in Europe : Experience, Prospects and Policy Challenges

This paper discusses the development of local loop unbundling in telecommunications markets throughout the European Union. It elaborates on the regulatory framework in Europe and provides an overview of recent experiences in Europe. Different types of unbundling, allowing for different types of entry and services provided by entrants, are discussed. This paper also explores the challenges for policy and regulation that arise because of unbundling and recent, related technological developments in the markets for fixed voice telephony and broadband internet access, particularly the emergence of packet-switched telephony such as VoIP (Voice over Internet Protocol).

Technological change in markets with network externalities

Abstract This paper examines a duopoly model in which firms have to decide simultaneously on product innovation and compatibility of the successor technologies with the established industry standard. We show that in markets with homogeneous consumers there may be a bias towards a new standard (excess momentum), despite the presence of network externalities and an installed base. In markets with heterogeneous consumers, sufficient conditions for the coexistence of two incompatible networks are derived and it is shown that both excess momentum and excess inertia are possible.

Structural Separation and Access in Telecommunications Markets

This paper presents a basic framework to assess whether structural (vertical) separation is desirable. It is discussed within the setting of fixed telecommunications markets. From an economists perspective, the key question that underlies the case for structural separation is: is there a persistent bottleneck? The obvious candidate is the local loop, or local access network. If yes then it makes sense to compare the costs and benefits of structural separation. The framework provides a set of options that the regulator can use strategically, by using the threat of a break-up to influence an incumbents competitive stance in the wholesale market.This paper presents a basic framework to assess whether structural (vertical) separation is desirable. It is discussed within the setting of fixed telecommunications markets. From an economist’s perspective, the key question that underlies the case for structural separation is: is there a persistent bottleneck? The obvious candidate is the ‘local loop’, or local access network. If yes then it makes sense to compare the costs and benefits of structural separation. The framework provides a set of options that the regulator can use strategically, by using the threat of a break-up to influence an incumbent’s competitive stance in the wholesale market.

Access Regulation and the Adoption of VoIP

The introduction of packet-switched telephony in the form of Voice over Internet Protocol (VoIP) raises concerns about current regulatory practice. Access regulation has been designed for traditional telephony on public networks (PSTN). In this paper we analyze the effect of access regulation and retail price regulation of PSTN networks on the adoption of a new technology in the form of VoIP. In particular, we show that with endogenous consumer choice between PSTN and VoIP telephony, higher prices for terminating access to the PSTN network make VoIP less likely to succeed and lead to lower profits of operators that offer exclusively VoIP telephony.

Regulating Access to Stimulate Competition in Postal Markets

In European Commission (2005), the Commission’s most recent progress report to the Council on the application of the Postal Directive1, it is stated:

Entry Deterrence and Signaling in Markets for Search Goods

This paper studies entry in markets for search goods. Signaling through prices is studied when an entrant s quality is (i) private information; and (ii) common information of entrant and incumbent. When consumers visit a store, they observe quality and can switch before purchasing. When switching costs are low, an entrant can signal high quality by setting a sufficiently high price; consumers who find out that quality is low switch to the incumbent. Entry may be facilitated when switching costs are sufficiently low, or when the incumbent knows the entrant s type.

Access to telecommunications networks

Contributing to a convergence of legal and economic approaches, The Economics of Antitrust and Regulation in Telecommunications integrates economic theory into current EU antitrust policy within the sector. The book addresses the role of competition and regulatory policies on a number of key issues in telecommunications, such as market definition, collective dominance, access to networks, and allocation of scarce resources.

Broadband Policy in the Light of the Dutch Experience with Telecommunications Liberalization

More than a decade has passed since the liberalization of telecommunications in the Netherlands. Nevertheless, the regulator is still mandating access to local access networks, and the incumbent and cable operators have been dragging their feet on upgrading their networks to fiber-based next generation networks. Is the gradual introduction of facilities-based competition, by fine-tuning access regulation, working as intended? What can one learn from the Dutch experience? As scale economies are persistent and broadband networks are becoming an integral part of our critical infrastructures, it is important to reassess the role of the government, on issues ranging from network neutrality to broadband penetration, universal service, and security. The outcome of such an assessment could be incongruent with the blueprint of competition held on to by policymakers and regulators.

Market Integration and Technological Change

This paper studies the incentives of firms to introduce new technologies in markets where network effects are sensitive to the identity of the adopter. We model this sensitivity by considering a market in which consumers are located in two economies and network effects across economies are weaker than intra-economy network effects. The strength of cross economy network effects is measured by the degree of market integration. We show that the incentives for technological change are decreasing with respect to the degree of integration and that they are in excess of what is socially desirable. We also show that different generation technologies can coexist only if the market is poorly integrated and that this coexistence is characterized by a form of technological leap-frogging across economies.