Access by Capacity and Peak-Load Pricing
Several European telecommunications regulatory agencies have recently introduced a fixed capacity charge (flat rate) to regulate access to the incumbents network. The purpose of this paper is to show that the optimal capacity charge and the optimal access-minute charge analysed by Armstrong, Doyle, and Vickers (1996) have a similar structure and imply the same payment for the entrant. I extend the analysis to the case where there is a competitor with market power. In this case, the optimal capacity charge should be modified to avoid that the entrant cream-skims the market, fixing a longer or a shorter peak period than the optimal. Finally, I consider a multiproduct setting, where the effect of the product differentiation is exacerbated.
|Date of creation:||2003|
|Date of revision:|
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- Robert E. Dansby, 1978. "Capacity Constrained Peak Load Pricing," The Quarterly Journal of Economics, Oxford University Press, vol. 92(3), pages 387-398.
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"Access Pricing and Competition,"
IDEI Working Papers
19, Institut d'Économie Industrielle (IDEI), Toulouse.
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"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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