Anchor product regulation – a new regulatory tool

Abstract

Purpose – The purpose of this paper is to introduce a new regulatory tool which is intermediate between an ex ante price control and no price control. Design/methodology/approach – The approach adopted utilises public sources and first-hand experience in relation to the development and implementation of anchor product regulation. Findings – Anchor product regulation is found to be an effective alternative to price control, particularly in the context of copper-fibre transition in access networks. The approach is less demanding in terms of information than a price control to implement, and evidence from the UK suggests that anchor product regulation improved investment incentives. Research limitations/implications – The degree of substitution between anchor products and other access products could be investigated where anchor product regulation has been implemented. Practical implications – Anchor product regulation is a practical tool which regulators can apply. Originality/value – Anchor product regulation is a new concept, and this paper for the first time sets out the motivation for anchor product regulation, its development and experience in terms of implementation.