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Structural Separation and Technological Diffusion

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dc.contributor.author Howell, Bronwyn
dc.date.accessioned 2015-05-18T02:22:28Z
dc.date.accessioned 2022-07-07T02:28:59Z
dc.date.available 2015-05-18T02:22:28Z
dc.date.available 2022-07-07T02:28:59Z
dc.date.copyright 2014
dc.date.issued 2014
dc.identifier.uri https://ir.wgtn.ac.nz/handle/123456789/19314
dc.description.abstract Vertical separation of upstream network operations from downstream retail activities, as the most extreme form of access regulation,has long been considered a legitimate regulatory remedy against use of market powerin upstream infrastructure markets to engage inprice-and non-price discrimination to foreclose competition in downstream retail markets. However, the remedy is increasingly being mandated for new networks, sometimes before any investment has been made.This paper uses theories of General Purpose Technologies and regulatory economics to consider how vertical separation–compared to both access regulation and no regulation-poses challenges to the ability to maximise scale economies at the early stage of a network life-cycle. This suggests greater caution in its use at this stage compared to middle and mature phases of the life-cycle. The theories are examined via case studies of two markets where vertical separation has been mandated for Fibre-to-the-Home networks–Australia and New Zealand–and one where ithas not–the Netherlands. The case studies suggest that mandatory separation imposes additional constraints on the network owner’s ability to achieve scale economies arising from rapid uptake of a new network relative to access regulation when it fails to replicate amongst any retailers the vertically-integrated operator’s incentives to engage in aggressive early-stage marketing. Analysisal so suggests that contractual limitations may have greater effect onthe ability to achieve scale economies than structural impositions and ownership limitations en_NZ
dc.format pdf en_NZ
dc.language.iso en_NZ
dc.publisher Te Herenga Waka—Victoria University of Wellington en_NZ
dc.rights Permission to publish research outputs of the New Zealand Institute for the Study of Competition and Regulation has been granted to the Victoria University of Wellington Library. Refer to the permission letter in record: https://ir.wgtn.ac.nz/handle/123456789/18870 en_NZ
dc.title Structural Separation and Technological Diffusion en_NZ
dc.type Text en_NZ
vuwschema.contributor.unit New Zealand Institute for the Study of Competition and Regulation en_NZ
vuwschema.contributor.unit Victoria Business School: Orauariki en_NZ
vuwschema.subject.anzsrcfor 149999 Economics not elsewhere classified en_NZ
vuwschema.type.vuw Working or Occasional Paper en_NZ
vuwschema.subject.anzsrcforV2 389999 Other economics not elsewhere classified en_NZ

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