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Long-Distance Access Network Design

Author

Listed:
  • Rosemary T. Berger

    (Department of Industrial and Systems Engineering, Lehigh University, Bethlehem, Pennsylvania 18015)

  • S. Raghavan

    (Robert H. Smith School of Business, University of Maryland, College Park, Maryland 20742)

Abstract

Long-distance telephone companies in the United States pay access fees to local telephone companies to transport calls that originate and terminate on their networks. These charges form the largest portion of the cost of providing long-distance service. Recent changes in the structure of access rates, which were mandated by the Federal Communications Commission (FCC), have created opportunities for long-distance companies to better manage access costs. In this paper, we develop an optimization-based approach to the economic design of access networks. Our novel solution approach combines stochastic aspects of the problem with a challenging discrete facility location problem in a three-phase algorithm. Computational results indicate a potential cost savings of hundreds of millions of dollars annually for long-distance companies.

Suggested Citation

  • Rosemary T. Berger & S. Raghavan, 2004. "Long-Distance Access Network Design," Management Science, INFORMS, vol. 50(3), pages 309-325, March.
    • Handle: RePEc:inm:ormnsc:v:50:y:2004:i:3:p:309-325
    DOI: 10.1287/mnsc.1030.0161
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    References listed on IDEAS

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    1. Sherali, Hanif D. & Lee, Youngho & Park, Taehyung, 2000. "New modeling approaches for the design of local access transport area networks," European Journal of Operational Research, Elsevier, vol. 127(1), pages 94-108, November.
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    Cited by:

    1. Nair, Rahul & Miller-Hooks, Elise, 2014. "Equilibrium network design of shared-vehicle systems," European Journal of Operational Research, Elsevier, vol. 235(1), pages 47-61.
    2. Rahul Nair & Elise Miller-Hooks, 2016. "Equilibrium design of bicycle sharing systems: the case of Washington D.C," EURO Journal on Transportation and Logistics, Springer;EURO - The Association of European Operational Research Societies, vol. 5(3), pages 321-344, August.

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