In the telecommunications industry, the ladder-of-investment approach claims that service-based competition (when entrants lease access to incumbents’ facilities) can serve as a “stepping stone” for facility-based entry (when entrants build their own infrastructures to provide services)....

This paper studies the implementation of Reasonably Efficient Operator margin squeeze tests by National Regulatory Authorities in European telecommunications markets. It provides a theoretical framework which shows how regulatory authorities deal with the asymmetries between entrants and...