Discussion Papers

Brigitte Bauer

Ansätze zur Erfassung und Regulierung der Qualität in den Monopolbereichen der DBP Telekom
Nr. 88 / Mai 1992

Summary

Within the reform of the postal and telecommunications system in 1989, telecommunications policy in the Federal Republic of Germany has moved towards a break up of the former monopolistic market structure by opening the respective markets to competition. Monopoly rights for DBP Telekom were retained for basic voice telephony and the provision of the physical network infrastructure. With the adherence to exclusive rights for DBP Telekom, questions of quality and customer oriented supply stay relevant.

This paper takes up two main questions with respect to quality issues: First, whether it is reasonable to assume that an unregulated monopolist does not offer the quality that meets customers' preferences best and, second, whether regulation can offer applicable solutions in cases where customers are offered an inappropriate quality. With regard to the first question it is shown that there is strong evidence for the assumption that statutory monopolies deviate from the quality levels and mixes which would be offered in a competitive market environment. With regard to the second question it is pointed out that regulators face severe difficulties when trying to identify and eliminate quality problems. While the "quality problem" seems relatively easy to handle as long as one deals with an environment of more or less homogeneous demand, no substantial technological changes, and a single quality dimension, considerable complexity is, however, introduced, when one considers an environment with multidimensional quality, rapid technological changes, and heterogeneous demand characteristics.

It is therefore concluded that regulators' chances to succeed in ensuring qualitative efficiency in reserved telecommunications markets are to rate low, and that, with the regulatory tools available, no more than the ensurance of certain basic quality levels seems attainable. Against this background it can be stated that the introduction of a formal procedure for quality of service monitoring is an indispensable step. A statistical definition of quality derived from such studies can be used to inform customers about the quality of service they actually have to expect. Furthermore, publication of quality of service data may serve as an instrument to objectify the public discussion on requests on DBP Telekom's quality of service.

Only German language version available.

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