Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

A Member of the Law Professor Blogs Network

Tuesday, September 1, 2009

Mobile Call Termination

Posted by D. Daniel Sokol

Mark Armstrong, University College London - Department of Economics and Julian Wright, National University of Singapore - Department of Economics analyze Mobile Call Termination.

ABSTRACT: We analyse charges levied by mobile telephone networks to deliver calls. We integrate two literatures: one analysing calls from the fixed network, where predicted unregulated termination charges are too high, and one analysing calls from rival mobile networks, where predicted charges are too low. In practice, however, networks adopt uniform charges for terminating both kinds of traffic, as do regulators. We show how incorporating wholesale arbitrage and demand-side substitution helps to reconcile theory with practice. In our framework, the unregulated charge is uniform and typically lies between the efficient and monopoly benchmarks. There remains a rationale for regulation, albeit reduced.

http://lawprofessors.typepad.com/antitrustprof_blog/2009/09/mobile-call-termination.html

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