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Essentiality, Efficiency, and the Efficient Component-Pricing Rule

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  • Larson, Alexander C
  • Lehman, Dale E

Abstract

The determination of interconnection charges to essential facilities is an important problem in regulated telecommunications markets in the wake of the Telecommunications Act of 1996. This paper defines mathematical conditions for the essentiality of upstream productive inputs and examines their implications for efficient interconnection pricing. The paper shows conditions under which the efficient component-pricing rule (ECPR) can be derived as a special case of a Ramsey pricing rule. The paper also shows how efficient pricing differs from the ECPR for a number of interesting cases. Copyright 1997 by Kluwer Academic Publishers

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  • Larson, Alexander C & Lehman, Dale E, 1997. "Essentiality, Efficiency, and the Efficient Component-Pricing Rule," Journal of Regulatory Economics, Springer, vol. 12(1), pages 71-80, July.
    • Handle: RePEc:kap:regeco:v:12:y:1997:i:1:p:71-80
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    Cited by:

    1. Riechmann, Christoph, 2000. "Strategic pricing of grid access under partial price-caps -- electricity distribution in England and Wales," Energy Economics, Elsevier, vol. 22(2), pages 187-207, April.

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