In theory, network profits are independent of the reciprocal termination rates when operators charge nondiscriminatory call prices (Laffont, Rey and Tirole, 1998). Additionally, termination rates can be used to subsidize subscriber acquisition cost. This issue is typically known as a "waterbed...

The new regulatory framework in the digital sector in Europe is likely to fall short of expectations. A fragmented digital market with insuffi cient incentives for investment is the probable outcome. European regulators should abandon their approach in favour of a new and more flexible set of...