• Login
    View Item 
    •   Home
    • Yale Law School Journals
    • Yale Journal on Regulation
    • View Item
    •   Home
    • Yale Law School Journals
    • Yale Journal on Regulation
    • View Item
    JavaScript is disabled for your browser. Some features of this site may not work without it.

    Browse

    All of openYLSCommunitiesPublication DateAuthorsTitlesSubjectsThis CollectionPublication DateAuthorsTitlesSubjects

    My Account

    LoginRegister

    Statistics

    Display statistics

    Should Regulators Set Rates to Terminate Calls on Mobile Networks?

    • CSV
    • RefMan
    • EndNote
    • BibTex
    • RefWorks
    Thumbnail
    Name:
    10_21YaleJonReg261_2004_.pdf
    Size:
    2.982Mb
    Format:
    PDF
    Download
    Author
    Crandall, Robert
    Sidak, J.
    
    Metadata
    Show full item record
    URI
    http://hdl.handle.net/20.500.13051/8043
    Abstract
    When a person uses the traditional wireline telephone network to call another person on his cell phone, the fixed network must transfer the call to the mobile network to which the recipient subscribes. The fixed network provides originating access for the call, and the mobile network provides terminating access. This paper provides an economic analysis of the regulation of fixed-to-mobile termination rates. Mobile party pays ("MPP") creates better incentives than calling party pays ("CPP") for mobile network operators to place downward pressure on termination rates. Cellular telephone use in the United States and Canada has continued to increase at a significant pace despite the MPP regime and now far exceeds mobile telephone use in countries with CPP regimes. Multiple factors, including substitution possibilities for the callers of mobile subscribers, constrain the market power of mobile operators in setting mobile termination rates under CPP regimes. It is unrealistic for regulators to attempt to set mobile rates, including termination rates, at marginal cost. If large fixed network costs and customer acquisition costs must be recovered from variable charges, then marginal-cost-based pricing is not feasible. Also, the value to callers of being able to reach mobile subscribers justifies mobile termination charges that exceed marginal cost because of network externalities in mobile telecommunications. Finally, mobile termination rates that exceed marginal cost (or its proxy, long-run average incremental cost) are consistent with Ramsey (quasi-efficient) pricing. To the extent that high termination rates are a problem in countries that have embraced CPP, it is because customers are poorly informed of the charges they pay for their terminating calls. Consumer education would solve the potential market failure without the need to impose price regulation on otherwise competitive markets.
    Collections
    Yale Journal on Regulation

    entitlement

     
    DSpace software (copyright © 2002 - 2025)  DuraSpace
    Quick Guide | Contact Us
    Open Repository is a service operated by 
    Atmire NV
     

    Export search results

    The export option will allow you to export the current search results of the entered query to a file. Different formats are available for download. To export the items, click on the button corresponding with the preferred download format.

    By default, clicking on the export buttons will result in a download of the allowed maximum amount of items.

    To select a subset of the search results, click "Selective Export" button and make a selection of the items you want to export. The amount of items that can be exported at once is similarly restricted as the full export.

    After making a selection, click one of the export format buttons. The amount of items that will be exported is indicated in the bubble next to export format.