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Pereira P.,Autoridade da Concorrencia | Vareda J.,University of Evora
Telecommunications Policy | Year: 2013

In this article, one makes two points about the impact of bundles on competition and regulatory policy. First, one argues that the growing importance of bundles requires an adjustment in the current framework of relevant product markets for individual services, and that the traditional tools of competition policy, namely the SSNIP test, can be adjusted to deal with these new circumstances. Second, one argues that the technological and behavioral changes, underlying the emergence of bundles, call for a shift of emphasis in regulatory policy from ensuring access to the incumbent's fixed telecommunications network services to ensuring access to television content. © 2012 Elsevier Ltd. All rights reserved. Source


Vareda J.,Autoridade da Concorrencia
Information Economics and Policy | Year: 2010

We study the impact of access regulation on an entrant's decision whether to invest in a telecommunications network or to ask for access when the regulator cannot observe its efficiency level. We show that an efficient entrant may have incentives to target low demand after entry in order to convince the regulator that it needs cheap access in the future. Therefore, the regulator must set access prices, contingent on demand, which penalize the inefficient entrant. We further show that, although linear prices are not always sufficient to promote the investment of an efficient entrant without introducing distortions, two-part tariffs already allow the regulator to achieve this objective. © 2009 Elsevier B.V. All rights reserved. Source


Vareda J.,Autoridade da Concorrencia
Telecommunications Policy | Year: 2010

This papers studies if access price regulation has an impact on incumbents' incentives to invest in their network that might differ according to the nature of investments, that is, quality-upgrading and cost-reducing. It is shown that if the marginal cost of quality-upgrading is very low both types of investment are increasing in the access price. If the marginal cost of cost-reducing is very low, both investments decrease after an increase in the access price. Otherwise, a high access price increases the incentives for quality-upgrading and reduces the incentives for cost-reducing. Therefore, regulators should set a higher access price the lower is the marginal cost of quality-upgrading as compared to the marginal cost of cost-reducing. © 2010 Elsevier Ltd. All rights reserved. Source


Brito D.,New University of Lisbon | Pereira P.,Autoridade da Concorrencia | Vareda J.,Autoridade da Concorrencia | Vareda J.,University of Lisbon
Telecommunications Policy | Year: 2011

The European Commission believes that for the regulation of next generation fixed telecommunications networks the continuity approach is preferable to the equality of access approach and the no-regulation approach. According to the European Commission, (i) functional separation eliminates discrimination and promotes competition, but should only be used as a measure of last resort because it involves various complex trade-offs, whereas (ii) the no-regulation approach fosters investment, at the cost of sacrificing competition. The article agrees that functional separation involves complex trade-offs but disputes the assertion that functional separation necessarily eliminates discrimination and promotes competition. In addition, the article also establishes conditions under which the no-regulation approach does not reduce competition. © 2011 Elsevier Ltd. All rights reserved. Source


Brito D.,New University of Lisbon | Brito D.,University of Evora | Pereira P.,Autoridade da Concorrencia | Pereira P.,University of Evora | And 2 more authors.
Information Economics and Policy | Year: 2012

We analyze the incentives of a vertically integrated firm, which is a regulated monopolist in the wholesale market and competes with an entrant in the retail market, to invest and to give access to a new wholesale technology. The new technology represents a non-drastic innovation that produces retail services of a higher quality than the old technology, and is left unregulated. We show that for intermediate values of the access price for the old technology, the vertically integrated firm may decide not to invest. When investment occurs, the vertically integrated firm may be induced to give access to the entrant for a low access price for the old technology. Furthermore, when both firms can invest, investment occurs under a larger set of circumstances, and it is the entrant the firm that invests in more cases. We also discuss the implications for the regulation of the old technology. © 2012 Elsevier B.V. Source

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