Network Interconnection In Telecommunications  

Oleh:

Armstrong, Mark

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: The Economic Journal (EBSCO) vol. 108 no. 448 (May 1998), page 545-564.
Fulltext: 545.pdf (332.96KB)

Isi artikel

This paper discusses industries such as telecommunications where ®rms each have their own customers and must interconnect with other ®rms to provide a comprehensive service. Two scenarios are considered: (i) the case of a symmetric, unregulated industry, and (ii) the case of an industry with a dominant, regulated incumbent. In the ®rst, provided there is suf®cient product differentiation, it is shown that ®rms agree to set interconnection charges above associated costs in order to obtain the joint pro®t-maximising outcome. In the second a formula for the welfare-maximizing interconnection charge is derived. Relations with the ef®cient component pricing rule' are discussed.

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