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An Efficient Avoided Cost Pricing Rule for Resale of Local Exchange Telephone Services

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  • Kaserman, David L
  • Mayo, John W

Abstract

The Telecommunications Act of 1996 requires incumbent local exchange telephone companies to make their retail telecommunications services available to resellers at a discount that reflects the costs that will be avoided by providing the services at wholesale rather than at retail. In this article, we develop a pricing methodology to apply to such wholesale services. The methodology, which we label the Avoided Cost Pricing Rule, is designed to generate an economically efficient discount that may be applied to the incumbent local exchange carriers' services that are offered to resellers. Copyright 1997 by Kluwer Academic Publishers

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  • Kaserman, David L & Mayo, John W, 1997. "An Efficient Avoided Cost Pricing Rule for Resale of Local Exchange Telephone Services," Journal of Regulatory Economics, Springer, vol. 11(1), pages 91-107, January.
    • Handle: RePEc:kap:regeco:v:11:y:1997:i:1:p:91-107
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    Cited by:

    1. Kahn, Alfred E. & Tardiff, Timothy J. & Weisman, Dennis L., 1999. "The Telecommunications Act at three years: an economic evaluation of its implementation by the Federal Communications Commission," Information Economics and Policy, Elsevier, vol. 11(4), pages 319-365, December.
    2. Kaserman, David L. & Mayo, John W., 1999. "Regulatory policies toward local exchange companies under emerging competition: guardrails or speed bumps on the information highway?," Information Economics and Policy, Elsevier, vol. 11(4), pages 367-388, December.
    3. Vogelsang, Ingo, 2005. "Resale und konsistente Entgeltregulierung," WIK Discussion Papers 269, WIK Wissenschaftliches Institut für Infrastruktur und Kommunikationsdienste GmbH.
    4. Neumann, Karl-Heinz, 2002. "Volkswirtschaftliche Bedeutung von Resale," WIK Discussion Papers 230, WIK Wissenschaftliches Institut für Infrastruktur und Kommunikationsdienste GmbH.

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