Search results

This paper aims to explore the three basic roles that access price plays: the collection of opportunity cost; the redistribution of profit; and the tools of exploiting competitors.

The paper uses the efficient component pricing rule.

According to the model constructed in this paper, it is found that, unless the basic commodities are the substitutes (independent) for combined goods, the opportunity cost arising from the access process is not necessarily positive. Besides, this analysis reveals that among the combined access prices there exist certain crowding‐out effects.

This paper finds that the access commodities' collusion equilibrium does not exist.

This paper adopts a more generalized set‐up to analyze the problem of access pricing. Besides, since the collection of opportunity cost is the most common and reasonable explanation for the existence of access pricing, this study conducts further analysis on this topic.

In 1999 the Federal Communications Commission adopted an order granting complete deregulation of the rates for special access service for specific metropolitan statistical areas based on an objective showing that there was potential competition in that market. This was done in an environment where the local exchange carriers (LECs) subject to price caps were earning a rate of return in excess of 22 percent, with the rate of return on an upward trend. By 2002, the average rate of return across all price cap LECs topped 35 percent. The question that is investigated in this paper is whether the price cap LECs have market power in supplying special access service and whether they have taken advantage of this. The data clearly show that this is the case. Given the prevailing situation, there is a clear need to revisit the pricing flexibility order. First, the product market for special access service needs to be more carefully examined. Second, the metrics used to define the potential for competition need to be revamped.

Within the new public management (NPM) context, this paper aims to examine the inclusion of equity issues in pricing policy development and implementation in the water industry in Australia.

A review of literature relevant to the pricing of water shows equity issues have four dimensions which tend to be, at best, only implicitly considered. An empirical illustration employing a transaction cost framework is provided of a case in which change in pricing mechanisms was strongly suggested.

An equity paradox emerges as an explanation of why 63.7 per cent of Queensland urban water entities chose not to adopt the user-pays pricing mechanism for water. This suggests that the balance between “equity” and “efficiency” continues to be required in policy development for water pricing. Equity of access and that of distribution continue to be significant factors. As well, equity of interest and of return must be considered, especially under a user-pays pricing mechanism.

In respect of NPM considerations, it is argued that consideration of the four dimensions of equity in the implementation of a water pricing policy will resolve contradictions with, and paradoxes met in dealing with efficiency.

The argument used in the paper is interdisciplinary. References and terms used include those which are social, economic, and environmental from an accounting and management perspective.

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.

The approach adopted utilises public sources and first-hand experience in relation to the development and implementation of anchor product regulation.

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.

The degree of substitution between anchor products and other access products could be investigated where anchor product regulation has been implemented.

Anchor product regulation is a practical tool which regulators can apply.

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.

This article surveys the recent experience of resolving access and interconnection issues in four quite different economies in East Asia: Singapore, Hong Kong, South Korea and Australia. It suggests that there are some important questions that decide how interconnect issues are resolved in practice: clarity of the rules; national priorities; regulator activism; emphasis on negotiation by the parties and the overall pricing model. The overall finding is that the degree of regulatory intervention required to make interconnect regimes work has largely been underestimated.

What rules, if any, should regulators put in place to provide incentives for timely and efficient investment in next generation fibre access networks (NGA) while, at the same time, preventing monopoly abuse, either by taking monopoly rents from end users or harming downstream competition? This paper aims to focus on these issues.

The findings in this paper are based on review of existing work in the area and on interviews with 25 operators and regulators across the European Union.

Active (bitstream) remedies will be important for preserving competition in the supply of retail, NGA‐based, products. Regulators should specify the price regulation principles, which would apply to operators found to have significant market power (SMP) in NGA supply in advance of any market definition and SMP assessment. Regulators should allow access providers to provide distinct NGA‐based bitstream products to meet the needs of different segments of the end‐user market and to then charge for these products at the wholesale level so as to reflect their value to end users rather than their costs.

This paper is designed to simulate general debate on the best way to regulate NGA

The purpose of this paper is to expose the necessity of introducing some degree of flexibility in the definition of wholesale access price of FTTx, in the EU competition regulatory framework, and incorporating new regulatory actions to boost investment substitutability to ensure that NRAs accomplish dynamic and/or static efficiency targets.

Given the European historical context, the current preponderance of cable and the strong heterogeneity in NGA networks rollout across Europe, a policy-oriented analysis defines a set of recommendations useful for member states whose NGA networks market is in a more advanced state of development.

Flexibility is necessary in jurisdictions holding a highly competitive NGA wholesale market at the three previously described levels to avoid that strong dynamic efficiency is passed-through into excessive retail prices which may decrease static efficiency in greater proportion, thereby generating a deadweight loss.

The novel measures pointed out are part of the on-going debate concerning the revision of the European regulatory framework for NGA networks.

Telecommunications was traditionally considered a natural monopoly. However, in 1982 AT&T was required to give up its control of local telephone services. As economies of scale and scope pervade telecommunications services, the neoclassical perfect competition model could not be applied as a benchmark for regulation. Baumol’s theory of contestable markets was referenced in the design of the new telecommunications regulation regime that followed the AT&T divestiture.

This chapter analyzes from a partially first-hand perspective Baumol’s contributions to the economics of telecommunications. After the AT&T breakup, a key issue to address was the access to the so-called last mile of copper wire owned exclusively by the local monopolies. Baumol together with his colleague Gregory Sidak claimed it was necessary to provide access to interconnection to all qualified applicants. Baumol and Willig proposed a pricing rule, which they argued ensures efficiency in the allocation of bottleneck input resources. The so-called parity-pricing formula is presented and discussed.

The developments in the telecommunications industry that took place during the last 25 years are pointed out, particularly the role played in them by mobile phones. Interconnection was also a vital element for them, and Baumol’s contributions are still a point of reference in this area. The chapter concludes with some reflections on Baumol’s methodological views based on personal correspondence.

Tracks the evolution of Internet interconnection and charging arrangements, drawing comparisons with telecommunication carriers’ arrangements. Focuses on how pricing arrangements could change ISP relationship’s nature from peer‐ to hierarchy‐based systems. Spotlights Internet basics and differences between telecoms and Internet pricing systems. Concludes that because of ISP, free riders and non‐explicit service subsidies, days are numbered.