IDEAS home Printed from https://ideas.repec.org/a/eee/juipol/v8y1999i2p83-98.html
   My bibliography  Save this article

The practice of access pricing: telecommunications in the United Kingdom

Author

Listed:
  • Valletti, Tommaso M.

Abstract

Telecommunications was the first network utility to be privatized in the United Kingdom. Drawing on 15 years'experience and discussion in the field, the author shows the economic principles of regulation in general and access pricing in particular that have been implemented. British Telecommunications (BT), formed as a public enterprise in 1980-81, was privatized in 1984. Since then the approaches to regulation have changed in three broad periods: the duoply, the transition to competition, and the recently introduced normalization phase. Dealing with each period, the author focuses on how the actual implementation of access charges are determined, at the same time providing background needed on regulatory intervention generally. Rather than follow the model of competition for a common infrastructure, Oftel [the Office of Telecommunications, the regulatory agency]has encouraged competition between alternative networks, which benefits customers but involves duplication of fixed costs. As a result of Oftel's approach, customers have seen their bills reduced 50 percent in real terms since privatization. It is difficult to know how much to attribute this remarkable result to technological progress (BT halved its workforce in the same period), to regulatory intervention (Oftel set string caps until 1997), or to competition (there are hundreds of players in the market). The author contends more weight should probably be given to the first two. Entrants have not achieved big market shares, if one considers the asymmetric regulation that has been in place for more than a decade. Indirectly, at least, competition benefited consumers by applying discipline to BT's behavior. Oftel's approach was interventionist until 1997, when it began trying to normalize the industry, as authority overseeing competition. The odds on complete deregulation are slight, and some controls on industry will remain. In the longer term, Oftel should especially monitor anticompetitive practices and col
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Valletti, Tommaso M., 1999. "The practice of access pricing: telecommunications in the United Kingdom," Utilities Policy, Elsevier, vol. 8(2), pages 83-98, June.
  • Handle: RePEc:eee:juipol:v:8:y:1999:i:2:p:83-98
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0957-1787(99)00012-0
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Armstrong, Mark, 1998. "Network Interconnection in Telecommunications," Economic Journal, Royal Economic Society, vol. 108(448), pages 545-564, May.
    2. Cave, Martin, 1997. "From cost plus determinations to a network price cap," Information Economics and Policy, Elsevier, vol. 9(2), pages 151-160, June.
    3. Armstrong, Mark, 1997. "Competition in Telecommunications," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 13(1), pages 64-82, Spring.
    4. Valletti, Tommaso M & Cave, Martin, 1998. "Competition in UK mobile communications," Telecommunications Policy, Elsevier, vol. 22(2), pages 109-131, March.
    5. Cave, Martin, 1997. "The evolution of telecommunications regulation in the UK," European Economic Review, Elsevier, vol. 41(3-5), pages 691-699, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Grout, Paul A., 2001. "Competition law in telecommunications and its implications for common carriage of water," Utilities Policy, Elsevier, vol. 10(3-4), pages 137-149.
    2. Joan Calzada & Francesc Trillas, 2005. "The interconnection prices in telecomunications: from theory to practice," Hacienda Pública Española / Review of Public Economics, IEF, vol. 173(2), pages 85-125, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kocsis, Viktória, 2005. "A hálózatok közötti aszimmetria hatása a mobilszolgáltatók végződtetési díjára [The effect of asymmetry among networks on the provision charges of mobile telephone services]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(7), pages 663-685.
    2. Ming Chung Chang & Hsiao‐Ping Peng, 2009. "Structure Regulation, Price Structure, Cross‐Subsidization And Marginal Cost Of Public Funds," Manchester School, University of Manchester, vol. 77(6), pages 675-698, December.
    3. Steffen Hoernig & Roman Inderst & Tommaso Valletti, 2014. "Calling circles: network competition with nonuniform calling patterns," RAND Journal of Economics, RAND Corporation, vol. 45(1), pages 155-175, March.
    4. Tommaso Valletti, 2003. "Is Mobile Telephony a Natural Oligopoly?," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 22(1), pages 47-65, February.
    5. Grout, Paul A., 2001. "Competition law in telecommunications and its implications for common carriage of water," Utilities Policy, Elsevier, vol. 10(3-4), pages 137-149.
    6. Fraquelli, Giovanni & Vannoni, Davide, 2000. "Multidimensional performance in telecommunications, regulation and competition: analysing the European major players," Information Economics and Policy, Elsevier, vol. 12(1), pages 27-46, March.
    7. Joan Calzada & Francesc Trillas, 2005. "The interconnection prices in telecomunications: from theory to practice," Hacienda Pública Española / Review of Public Economics, IEF, vol. 173(2), pages 85-125, June.
    8. Carlo Cambini, 2000. "Competition between Vertically Integrated Networks: a Generalized Model," ICER Working Papers 01-2000, ICER - International Centre for Economic Research.
    9. Kotakorpi, Kaisa, 2002. "Access Pricing and Competition in Telecommunications," Discussion Papers 283, VATT Institute for Economic Research.
    10. Ingo Vogelsang, 2006. "Access and Interconnection Pricing Issues in Telecommunications," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 4(3), pages 3-9, October.
    11. Berger, Ulrich, 2005. "Bill-and-keep vs. cost-based access pricing revisited," Economics Letters, Elsevier, vol. 86(1), pages 107-112, January.
    12. Mark Armstrong & Julian Wright, 2009. "Mobile Call Termination," Economic Journal, Royal Economic Society, vol. 119(538), pages 270-307, June.
    13. Jahn, Eric & Prüfer, Jens, 2008. "Interconnection and competition among asymmetric networks in the Internet backbone market," Information Economics and Policy, Elsevier, vol. 20(3), pages 243-256, September.
    14. Stennek, Johan & Tangerås, Thomas, 2006. "Competition vs. Regulation in Mobile Telecommunications," Working Paper Series 685, Research Institute of Industrial Economics.
    15. Muñoz-Acevedo, Ángela & Grzybowski, Lukasz, 2023. "Impact of roaming regulation on revenues and prices of mobile operators in the EU," International Journal of Industrial Organization, Elsevier, vol. 89(C).
    16. Ambre Nicolle & Lukasz Grzybowski & Christine Zulehner, 2018. "Impact Of Competition, Investment, And Regulation On Prices Of Mobile Services: Evidence From France," Economic Inquiry, Western Economic Association International, vol. 56(2), pages 1322-1345, April.
    17. Koning, Kendall J. & Yankelevich, Aleksandr, 2018. "From internet “Openness” to “Freedom”: How far has the net neutrality pendulum swung?," Utilities Policy, Elsevier, vol. 54(C), pages 37-45.
    18. repec:zbw:bofrdp:2005_019 is not listed on IDEAS
    19. Kauko, Karlo, 2007. "Interlinking securities settlement systems: A strategic commitment?," Journal of Banking & Finance, Elsevier, vol. 31(10), pages 2962-2977, October.
    20. Viktória Kocsis, 2005. "Network Asymmetries and Access Pricing in Cellular Telecommunications," Tinbergen Institute Discussion Papers 05-085/1, Tinbergen Institute.
    21. Ángel L. López & Patrick Rey, 2009. "Foreclosing Competition through Access Charges and Price Discrimination," Working Papers 2009.99, Fondazione Eni Enrico Mattei.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:juipol:v:8:y:1999:i:2:p:83-98. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.sciencedirect.com/journal/utilities-policy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.