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Cost orientation and xDSL services: Retail-minus vs. LRAIC

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  • Gonçalves, Ricardo

Abstract

Forward-looking long run average incremental cost (LRAIC) bottom-up models have now established themselves as a popular methodology to guide European telecommunications regulators' setting of interconnection charges between the incumbent and other operators. The purpose of this article is to discuss the adequacy of using bottom-up LRAIC models or retail-minus to calculate bitstream access charges--the charges typically applicable to wholesale xDSL services. In particular, the author is interested in the cost drivers of such services, how different they are from circuit-switched voice services, and ultimately whether retail-minus should be preferred over LRAIC models when setting these bitstream charges.

Suggested Citation

  • Gonçalves, Ricardo, 0. "Cost orientation and xDSL services: Retail-minus vs. LRAIC," Telecommunications Policy, Elsevier, vol. 31(8-9), pages 524-529, September.
    • Handle: RePEc:eee:telpol:v:31:y::i:8-9:p:524-529
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    Cited by:

    1. Ricardo GONCALVES & Álvaro NASCIMENTO, 2013. "Next Generation Access Networks: The Post-Investment Conundrum," Communications & Strategies, IDATE, Com&Strat dept., vol. 1(92), pages 91-112, 4th quart.
    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.

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