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Allocating and Funding Universal Service Obligations in a Competitive Network Market

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  • Philippe Choné

    (Crest)

  • Laurent Flochel

    (Crest)

  • Anne Perrot

    (Crest)

Abstract

We examine, in a network market open to competition, various mechanisms of allocating and funding ''universal service obligations'' among agents (rival operators and consumers). The obligations we consider are geographic ubiquity and non discrimination. We analyze, from both the efficiency and equity point of views, the respective advantages of a ''restricted-entry'' system (where the entrant is not allowed to serve high cost consumers) and the ''pay or play'' system at work for instance in Australia. We show that the pay or play regulation always dominates the restricted-entry regulation under ubiquity constraint alone. This result no longer holds when the regulator imposes also the non discrimination constraint.

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Bibliographic Info

Paper provided by Centre de Recherche en Economie et Statistique in its series Working Papers with number 99-55.

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Date of creation: 1999
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Handle: RePEc:crs:wpaper:99-55

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  1. Paul R. Milgrom, 1985. "Auction Theory," Cowles Foundation Discussion Papers 779, Cowles Foundation for Research in Economics, Yale University.
  2. Gasmi, Farid & Laffont, Jean-Jacques & Sharkey, William, 1999. "Competition, Universal Service and Telecommunications Policy in Developing Countries," IDEI Working Papers 92, Institut d'Économie Industrielle (IDEI), Toulouse.
  3. Anton, James J & Vander Weide, James H & Vettas, Nikolaos, 1998. "Strategic Pricing and Entry under Universal Service and Cross-Market Price Constraints," CEPR Discussion Papers 1922, C.E.P.R. Discussion Papers.
  4. Armstrong, M. & Doyle, C. & Vickers, J., 1995. "The access pricing problem: a synthesis," Discussion Paper Series In Economics And Econometrics 9532, Economics Division, School of Social Sciences, University of Southampton.
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Cited by:
  1. Laura Ilie & Ramiro Losada, 2004. "Endogenous Financing Of The Universal Service," Economics Working Papers we044116, Universidad Carlos III, Departamento de Economía.
  2. Axel Gautier & Dimitri Paolini, 2010. "Universal service financing in competitive postal markets:One size does not fit all," CREPP Working Papers 1004, Centre de Recherche en Economie Publique et de la Population (CREPP) (Research Center on Public and Population Economics) HEC-Management School, University of Liège.
  3. Mirabel, F. & Poudou, J.-C., 2003. "Mechanisms of Funding for Universal Service Obligations: the Electricity Case," Cahiers du CREDEN (CREDEN Working Papers) 03.11.41, CREDEN (Centre de Recherche en Economie et Droit de l'Energie), Faculty of Economics, University of Montpellier 1.
  4. Marc Bourreau & Cambini Steffen, 2013. "Geographic Access Rules and Investments," RSCAS Working Papers 2013/28, European University Institute.
  5. Jean-Christophe Poudou & Michel Roland, 2013. "Efficiency of Uniform Pricing in Universal Service Obligation," Working Papers 13-13, LAMETA, Universtiy of Montpellier, revised Nov 2013.
  6. Gautier, Axel & Wauthy, Xavier, 2012. "Competitively neutral universal service obligations," Information Economics and Policy, Elsevier, vol. 24(3), pages 254-261.
  7. Kenneth Fjell & Øystein Foros & Debashis Pal, 2010. "Endogenous Average Cost Based Access Pricing," Review of Industrial Organization, Springer, vol. 36(2), pages 149-162, March.
  8. Ramiro Losada, 2004. "Should Network Operators Be Allowed To Build Joint Facilities?," Economics Working Papers we043914, Universidad Carlos III, Departamento de Economía.
  9. Chone, Philippe & Flochel, Laurent & Perrot, Anne, 2000. "Universal service obligations and competition," Information Economics and Policy, Elsevier, vol. 12(3), pages 249-259, September.
  10. Holthausen, Cornelia & Rochet, Jean-Charles, 2005. "Incorporating a "public good factor" into the pricing of large-value payment systems," Working Paper Series 0507, European Central Bank.
  11. Ramiro Losada, 2004. "On The Definition Of Affordable Prices Under Universal Service Obligations," Economics Working Papers we044015, Universidad Carlos III, Departamento de Economía.
  12. Aguilar-Barceló, José G., 2003. "El estado actual de las telecomunicaciones en México: la regulación que no llega
    [The state of the telecommunications sector in Mexico: when will be realized a new regulation?]
    ," MPRA Paper 4734, University Library of Munich, Germany, revised 09 Jun 2003.
  13. Silvia Concettini & Anna Créti, 2013. "Liberalization of electricity retailing in Europe: coming back or going forth?," Working Papers hal-00915924, HAL.
  14. Antonio Estache & L. Wren-Lewis, 2008. "Towards a Theory of Regulation for Developing Countries: Following Laffont's Lead," Working Papers ECARES 2008_018, ULB -- Universite Libre de Bruxelles.

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