Interconnected Networks

In this paper, we take a critical perspective on the common regulatory reply to deal with call termination on mobile networks. The current policy tendency to deal with fixed-to-mobile call termination is to restrict attention to the defined relevant market (call termination on single networks is the usual outcome), establish substantial market power, and regulate the prices in question. This approach is understandable within the context of the regulatory framework in the EU, but it ignores important elements of the broader picture and therefore risks to be misguided from a welfare viewpoint. Compared to price controls, there exist alternative, less heavy-handed, ways to intervene, which are directly aiming at the root cause of the problem and can make access regulation unnecessary. For instance, inducing mobile operators to apply RPP instead of CPP is a straightforward and simple remedy, as it instantaneously eliminates the root cause of call termination monopolies