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Competitive Neutrality in Access Pricing

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  • Joshua S. Gans
  • Stephen P. King

Abstract

This article examines the notion of competitive neutrality when setting access prices for vertically integrated bottleneck networks. In contrast to the claims of regulated firms (for example, Telstra), it is not possible to argue that access charges that involve unit prices in excess of short-run marginal cost reflect competitive neutrality. That is, we demonstrate that in general models of downstream oligopoly, upstream prices that differ from marginal cost are not competitively neutral in the sense of placing integrated and non-integrated firms on an equal basis. Copyright 2005 The University of Melbourne, Melbourne Institute of Applied Economic and Social Research.

Suggested Citation

  • Joshua S. Gans & Stephen P. King, 2005. "Competitive Neutrality in Access Pricing," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 38(2), pages 128-136, June.
    • Handle: RePEc:bla:ausecr:v:38:y:2005:i:2:p:128-136
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    Cited by:

    1. Cave, Martin, 2013. "Extending competition in network industries: Can input markets circumvent the need for an administered access regime?," Utilities Policy, Elsevier, vol. 27(C), pages 82-92.
    2. Briglauer Wolfgang & Götz Georg & Schwarz Anton, 2011. "Margin Squeeze in Fixed-Network Telephony Markets -- Competitive or Anticompetitive?," Review of Network Economics, De Gruyter, vol. 10(4), pages 1-21, December.
    3. Balmer, Roberto E., 2014. "Competition and market strategies in the Swiss fixed telephony market," 20th ITS Biennial Conference, Rio de Janeiro 2014: The Net and the Internet - Emerging Markets and Policies 106837, International Telecommunications Society (ITS).
    4. Balmer, Roberto, 2013. "Competition and Market Strategies in the Swiss Fixed Telephony Market. An estimation of Swisscom’s dynamic residual demand curve," MPRA Paper 54078, University Library of Munich, Germany.
    5. Balmer, Roberto E., 2015. "Competition and market strategies in the Swiss fixed telephony market," 26th European Regional ITS Conference, Madrid 2015 127123, International Telecommunications Society (ITS).

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