A ciascuno il tuo: concorrenza e servizio universale
Differential pricing for access to bottleneck inputs such as local telephone facilities or electricity transmission facilities is shown to solve the old dilemma of de-regulation: facilitating competitive entry without destroying cross subsidies indispensable for "universal service" programs. If bottleneck facilities are inputs to two services, one of which subsidizes the other, entrants that provide the subsidized service must receive the same subsidy in the access price as consumers receive when they purchase those services. Rivals in the supply of the other service must contribute an equivalent subsidy through paying a higher access price. Differential access pricing allows efficient competitors to find it equally profitable to supply either service because any motive for "cream-skimming" disappears. Such differential pricing, coupled with access pricing consistent with the Efficient Component Pricing Rule, is shown to be necessary for economic efficiency.
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.
When requesting a correction, please mention this item's handle: RePEc:mul:jhpfyn:doi:10.1434/55:y:1999:i:1:p:65-78. 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: ()
If references are entirely missing, you can add them using this form.