Discussion Papers

Werner Neu, Karl-Heinz Neumann

Interconnection Agreements inTelecommunications
Nr. 106 / April 1993
(no longer available)


This study has been prepared for the European Commission. It describes and analyzes the interconnection of telecommunications networks in six countries. The study begins with a brief theoretical treatment of the issue of interconnection for the development of competition in telecommunications markets. Then follow the country analyses. In the last chapter, the insights of the study are interpreted regarding their implications for the future development of telecommunications markets in Europe.

The six countries investigated are the USA, Japan, Australia, the UK, France, and Germany. For each of the countries, there is first a brief description of the process by which competition was introduced into the sector. The main part of each country analysis then describes how the regulatory authorities - and sometimes the courts - have used interconnection to support the process of competition. It also reveals what the limits are of an active interconnection policy on the part of regulators.

The analysis shows that due to the monopoly power of incumbent operators the use of interconnection is a necessary prerequisite for the successful introduction of competition into the sector. At the same time, the example of the countries in which competition has progressed the most makes clear that interconnection cannot be relied on as an unlimited protection for new competitors. At the time when telecommunications markets are not hampered any more by bottlenecks giving monopoly power to some operator(s), the regime of mandatory interconnection must be replaced by one in which the interconnection of networks is determined by normal market processes.

Discussion Paper is no longer available. 

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