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

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  • Marcel Boyer

Abstract

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.

Suggested Citation

  • Marcel Boyer, 1997. "Competition and Access in Telecoms: ECPR, Global Price Cap, and Auctions," CIRANO Working Papers 97s-03, CIRANO.
  • Handle: RePEc:cir:cirwor:97s-03
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    File URL: http://www.cirano.qc.ca/files/publications/97s-03.pdf
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    References listed on IDEAS

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    1. Laffont, Jean-Jacques & Tirole, Jean, 1994. "Access pricing and competition," European Economic Review, Elsevier, vol. 38(9), pages 1673-1710, December.
    2. Robert Wilson, 1979. "Auctions of Shares," The Quarterly Journal of Economics, Oxford University Press, vol. 93(4), pages 675-689.
    3. Armstrong, Mark & Doyle, Chris & Vickers, John, 1996. "The Access Pricing Problem: A Synthesis," Journal of Industrial Economics, Wiley Blackwell, vol. 44(2), pages 131-150, June.
    4. Branco, Fernando, 1995. "Multi-object Auctions: On the Use of Combinational Bids," CEPR Discussion Papers 1216, C.E.P.R. Discussion Papers.
    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. Laffont, Jean-Jacques & Tirole, Jean, 1996. "Creating Competition through Interconnection: Theory and Practice," Journal of Regulatory Economics, Springer, vol. 10(3), pages 227-256, November.
    7. Robert J. Weber, 1981. "Multiple-Object Auctions," Discussion Papers 496, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    8. John McMillan, 1994. "Selling Spectrum Rights," Journal of Economic Perspectives, American Economic Association, vol. 8(3), pages 145-162, Summer.
    9. John Vickers, 1995. "Competition and Regulation in Vertically Related Markets," Review of Economic Studies, Oxford University Press, vol. 62(1), pages 1-17.
    10. 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.
    11. Marcel Boyer, 1995. "La réglementation incitative," CIRANO Papers 95c-01, CIRANO.
    12. 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, January.
    13. J. Gregory Sidak & William Baumol, 1994. "Toward Competition in Local Telephony," Books, American Enterprise Institute, number 52984.
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    Citations

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    Cited by:

    1. René Garcia & Èric Renault, 1998. "A Note on Hedging in ARCH and Stochastic Volatility Option Pricing Models," Mathematical Finance, Wiley Blackwell, vol. 8(2), pages 153-161.
    2. Marcel Boyer, 1997. "L'économie des organisations : Mythes et réalités," CIRANO Working Papers 97s-02, CIRANO.
    3. Eric Ghysels & Joanna Jasiak, 1997. "GARCH for Irregularly Spaced Data: The ACD-GARCH Model," CIRANO Working Papers 97s-06, CIRANO.
    4. Harry J. Paarsch & Bruce S. Shearer, 1997. "Fixed Wages, Piece Rates, and Intertemporal Productivity: A Study of Tree Planters in British Columbia," CIRANO Working Papers 97s-01, CIRANO.
    5. Benoit A. Aubert & Michel Patry & Suzanne Rivard, 1997. "La régie des services informatiques : Le rôle de la mesure et des compétences dans les décisions d'impartition," CIRANO Working Papers 97s-04, CIRANO.
    6. Élisabeth Lefebvre & Louis A. Lefebvre, 1997. "Global Strategic Benchmarking, Critical Capabilities and Performance of Aerospace Subcontractors," CIRANO Working Papers 97s-10, CIRANO.

    More about this item

    Keywords

    Regulation; Competition; Telecommunications; Réglementation; concurrence; télécommunications;

    JEL classification:

    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software

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