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Competition and Access in Telecoms: ECPR, Global Price Cap, and Auctions

  • Marcel Boyer

Many network industries (telecommunications, electricity, natural gas, postal services, water and sewage services, etc.) are confronted with significant logistic and behavioral problems in their transition towards competition. In this article, I first recall some general principes and fundamental facts and issues before proceeding with the basic procedures through which competition can be introduced in telecommunications markets, that is the access pricing rules. I compare the efficient component pricing rule, the Ramsay pricing rule, the global price cap rule, and show how the latter could in fact be an answer to many of the concerns and questions raised in the search for an efficient way to introduce competition in telecommunications markets. I then continue by presenting some recent research on network access auctions, a possible approach to increasing competition with soft or light-handed regulation. I then conclude by raising some neglected albeit important issues. Les industries-réseaux (télécommunications, électricité, gaz naturel, services postaux, services d'aqueduc et d'égouts, etc.) font face à de sérieux problèmes dans leur transition vers la concurrence. Dans cet article, je rappelle d'abord quelques faits et principes avant de discuter des procédures par lesquelles la concurrence peut être introduite, à savoir les règles et conditions d'accès aux réseaux. Je compare la règle de tarification efficace des composantes, la règle de Ramsey et la règle du plafonnement global des prix et je montre que cette dernière peut être la réponse à plusieurs questions soulevées dans la recherche d'une approche efficace à la transition vers la concurrence. Je poursuis avec la présentation d'un mécanisme d'enchère qui pourrait aussi permettre le développement ordonné de la concurrence. En conclusion, je rappelle divers facteurs généralement négligés0501s néanmoins importants.

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Paper provided by CIRANO in its series CIRANO Working Papers with number 97s-03.

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Length: 28 pages
Date of creation: 01 Jan 1997
Date of revision:
Handle: RePEc:cir:cirwor:97s-03
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  1. Robert J. Weber, 1981. "Multiple-Object Auctions," Discussion Papers 496, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  2. 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.
  3. Wilson, Robert, 1979. "Auctions of Shares," The Quarterly Journal of Economics, MIT Press, vol. 93(4), pages 675-89, November.
  4. Marcel Boyer, 1995. "La réglementation incitative," CIRANO Papers 95c-01, CIRANO.
  5. Nicholas Economides & Lawrence J. White, 1995. "Access and Interconnection Pricing: How Efficient is the Efficient Component Pricing Rule?," Working Papers 95-04, New York University, Leonard N. Stern School of Business, Department of Economics.
  6. J. Gregory Sidak & William Baumol, 1994. "Toward Competition in Local Telephony," Books, American Enterprise Institute, number 52984, 6.
  7. Cramton, Peter C, 1995. "Money Out of Thin Air: The Nationwide Narrowband PCS Auction," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 4(2), pages 267-343, Summer.
  8. John McMillan, 1994. "Selling Spectrum Rights," Journal of Economic Perspectives, American Economic Association, vol. 8(3), pages 145-162, Summer.
  9. Laffont, Jean-Jacques & Tirole, Jean, 1992. "Access Pricing and Competition," IDEI Working Papers 19, Institut d'Économie Industrielle (IDEI), Toulouse.
  10. Vickers, John, 1995. "Competition and Regulation in Vertically Related Markets," Review of Economic Studies, Wiley Blackwell, vol. 62(1), pages 1-17, January.
  11. Mark Armstrong & Simon Cowan & John Vickers, 1994. "Regulatory Reform: Economic Analysis and British Experience," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262510790, June.
  12. Laffont, Jean-Jacques & Tirole, Jean, 1996. "Creating Competition through Interconnection: Theory and Practice," Journal of Regulatory Economics, Springer, vol. 10(3), pages 227-56, November.
  13. Branco, Fernando, 1995. "Multi-object Auctions: On the Use of Combinational Bids," CEPR Discussion Papers 1216, C.E.P.R. Discussion Papers.
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