The practice of access pricing: telecommunications in the United Kingdom
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.)
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Cave, Martin, 1997. "From cost plus determinations to a network price cap," Information Economics and Policy, Elsevier, vol. 9(2), pages 151-160, June.
- Valletti, Tommaso M & Cave, Martin, 1998. "Competition in UK mobile communications," Telecommunications Policy, Elsevier, vol. 22(2), pages 109-131, March.
- Armstrong, Mark, 1997. "Competition in Telecommunications," Oxford Review of Economic Policy, Oxford University Press, vol. 13(1), pages 64-82, Spring.
- Armstrong, Mark, 1998. "Network Interconnection in Telecommunications," Economic Journal, Royal Economic Society, vol. 108(448), pages 545-64, May.
- Cave, Martin, 1997. "The evolution of telecommunications regulation in the UK," European Economic Review, Elsevier, vol. 41(3-5), pages 691-699, April.
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.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Shamier, Wendy)
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.