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Regulation of New Markets in Telecommunications: Market Dynamics and Shrinking Monopolistic Bottlenecks

This paper focuses on localising network-specific market power in new markets. Three levels of transmission quality in service markets can be differentiated according to the products provided: narrowband services like PSTN/ISDN or GSM, semi high-speed broadband services, like broadband internet access up to 6 Mbps download, and VDSL services up to 50 Mbps. As long as a monopolistic bottleneck exists in local infrastructure networks due to the absence of alternative network infrastructures, the question arises what the remaining bottleneck components are for these different markets. In this paper, the shrinking bottleneck hypothesis will be demonstrated.