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Effects of Temporary Regulation of Asymmetric Access Charges in Telecommunications
Author(s) -
Shibata Takashi,
Nishihara Michi
Publication year - 2017
Publication title -
managerial and decision economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.288
H-Index - 51
eISSN - 1099-1468
pISSN - 0143-6570
DOI - 10.1002/mde.2780
Subject(s) - deregulation , investment (military) , economics , industrial organization , economic surplus , point (geometry) , welfare , perfect competition , business , market economy , microeconomics , telecommunications , computer science , geometry , mathematics , politics , political science , law
In a liberalized telecommunications market, an incumbent possesses several advantages over any entrant. It has been claimed that in such a market environment, there should be regulation of asymmetric access charges between an incumbent and an entrant. In this paper, we show that asymmetric access charges should be imposed temporarily but not permanently. That is, there should be deregulation once the entrant is fully competitive with the incumbent. This is because temporary regulation accelerates corporate investment and enhances economic welfare. In addition, when the competitive market environment is most intense under temporary regulation, investment timing is at the earliest point, which maximizes consumer surplus. Copyright © 2015 John Wiley & Sons, Ltd.