Facility based competition in telecommunications : three essays on two-way access and one essay on three-way access

Abstract

In order to reap all benefits from telecommunications, competing firms typically have to cooperate in order to exploit economies of scale and scope. Thus, firms being active in the same market are supposed to compete in some dimensions and cooperate in other dimensions. There is potentially a trade-off between cooperation and competition. In this dissertation four cases of interplay between competition and cooperation are investigated and we find that in some cases there is indeed a trade-off. In some cases (but not all cases) firms can arrange their cooperation such that they are able to soften competition and increase prices. Whether such effects are present or not depends on technology and market characteristics. It is accordingly necessary to carry out case by case analysis in order to assess the interplay between cooperation and competition. A common feature of the four papers in the dissertation is that they take as a starting point a concrete and policy relevant issue where telecommunications firms have to cooperate. Game theoretic models are adapted to each case and particular care is taken in capturing relevant market and technology features.