Competition in Communication Networks: Pricing and Regulation

By any measure, the communication sector is important. It is no surprise, then, that the communication sector has attracted the attention of both policy‐makers and economists. In this paper, we argue that four characteristics of the networks that deliver communication services make this area of particular interest. We analyse the implications of networks' cost structures; the strong complementarity between their components; the demand‐side externalities that arise from consumption of their services; and the social obligations attached to them. Despite the attention that the communication sector has received, many aspects of competition between networks are still poorly understood. We identify some of the key issues that will continue to trouble regulators and interest academics.