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Wholesale unbundling and intermodal competition

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  • Ware, Harold
  • Dippon, Christian M.

Abstract

This paper explores the effects of network unbundling in telecommunications. It includes discussions of the basic economics of unbundling; the competitive effects of unbundling on voice services in the US and broadband in the US and the European Union; and unbundling policy in a world of convergence. Mandatory unbundling can delay facilities-based entry and reduce network investment, particularly if unbundled input prices are set too low. Excessive prices for essential network elements could hamper competitive entry. Some argue that mandatory unbundling has stimulated competition; however, the results suggest that when relevant demand and supply determinants are included in the analysis, the association between mandatory unbundling and increased broadband penetration is not statistically significant. Assessing the costs and benefits of unbundling is more difficult because of convergence and intermodal competition among the video, wireless and telephone providers. Thus, the dynamic nature of the sector and the costs of implementing mandatory unbundling imply that policy makers should carefully examine the costs and benefits of regulatory intervention.

Suggested Citation

  • Ware, Harold & Dippon, Christian M., 0. "Wholesale unbundling and intermodal competition," Telecommunications Policy, Elsevier, vol. 34(1-2), pages 54-64, February.
    • Handle: RePEc:eee:telpol:v:34:y::i:1-2:p:54-64
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    Citations

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    Cited by:

    1. Moreno, Plácido & Lozano, Sebastián & Gutiérrez, Ester, 2013. "Dynamic performance analysis of U.S. wireline telecommunication companies," Telecommunications Policy, Elsevier, vol. 37(6), pages 469-482.
    2. Fredebeul-Krein, Markus & Steingröver, Markus, 2014. "Wholesale broadband access to IPTV in an NGA environment: How to deal with it from a regulatory perspective?," Telecommunications Policy, Elsevier, vol. 38(3), pages 264-277.
    3. Rajabiun, Reza & Middleton, Catherine, 2013. "Regulation, investment and efficiency in the transition to next generation networks: Evidence from the European Union," 24th European Regional ITS Conference, Florence 2013 88536, International Telecommunications Society (ITS).
    4. Hrovatin, Nevenka & Švigelj, Matej, 2013. "The interplay of regulation and other drivers of NGN deployment: A real-world perspective," Telecommunications Policy, Elsevier, vol. 37(10), pages 836-848.
    5. Galperin, Hernán & Ruzzier, Christian A., 2013. "Price elasticity of demand for broadband: Evidence from Latin America and the Caribbean," Telecommunications Policy, Elsevier, vol. 37(6), pages 429-438.
    6. Eli M. NOAM, 2011. "Beyond Net Neutrality: End-User Sovereignty," Communications & Strategies, IDATE, Com&Strat dept., vol. 1(84), pages 153-173, 4th quart.
    7. Stanford Levin, 2010. "Issues and Policies for Universal Service and Net Neutrality in a Broadband Environment," Working Paper Series 4067, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.

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