Ex-Ante Margin Squeeze Tests in the Telecommunications Industry: What Is a Reasonably Efficient Operator?

31 Pages Posted: 21 Dec 2012 Last revised: 13 Aug 2013

See all articles by Germain Gaudin

Germain Gaudin

University of Freiburg - College of Economics and Behavioral Sciences

Claudia Saavedra

Regulatory Affairs - Orange

Date Written: August1 13, 2013

Abstract

We study the implementation of 'reasonably efficient operator' margin squeeze tests by National Regulatory Authorities in European telecommunications markets. We provide a theoretical framework in which we show how regulatory authorities deal with the asymmetries between entrants and incumbents by adjusting the 'equally efficient operator' margin squeeze test used in competition policy. Using this framework, we build a benchmark of implementation choices by inspecting authorities' guidelines, market analyses and decisions. We find that some implementation choices are very similar across authorities' decisions, whereas some others display a strong heterogeneity.

Keywords: Margin squeeze, Imputation test, Regulation, Telecommunications

JEL Classification: L51, L96

Suggested Citation

Gaudin, Germain and Saavedra Valenzuela, Claudia, Ex-Ante Margin Squeeze Tests in the Telecommunications Industry: What Is a Reasonably Efficient Operator? (August1 13, 2013). Available at SSRN: https://ssrn.com/abstract=2192212 or http://dx.doi.org/10.2139/ssrn.2192212

Germain Gaudin (Contact Author)

University of Freiburg - College of Economics and Behavioral Sciences

Freiburg, D-79085
Germany

Claudia Saavedra Valenzuela

Regulatory Affairs - Orange ( email )

78 rue Olivier de Serres
Paris, 75015
France

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
504
Abstract Views
2,223
Rank
103,005
PlumX Metrics