IDEAS home Printed from https://ideas.repec.org/p/bar/bedcje/2003108.html
   My bibliography  Save this paper

Access by Capacity and Peak-Load Pricing

Author

Listed:
  • Joan Calzada Aymerich

    (Universitat de Barcelona)

Abstract

Several European telecommunications regulatory agencies have recently introduced a fixed capacity charge (flat rate) to regulate access to the incumbents network. The purpose of this paper is to show that the optimal capacity charge and the optimal access-minute charge analysed by Armstrong, Doyle, and Vickers (1996) have a similar structure and imply the same payment for the entrant. I extend the analysis to the case where there is a competitor with market power. In this case, the optimal capacity charge should be modified to avoid that the entrant cream-skims the market, fixing a longer or a shorter peak period than the optimal. Finally, I consider a multiproduct setting, where the effect of the product differentiation is exacerbated.

Suggested Citation

  • Joan Calzada Aymerich, 2003. "Access by Capacity and Peak-Load Pricing," Working Papers in Economics 108, Universitat de Barcelona. Espai de Recerca en Economia.
    • Handle: RePEc:bar:bedcje:2003108
    as

    Download full text from publisher

    File URL: http://www.ere.ub.es/dtreball/E03108.rdf/at_download/file
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Laffont, Jean-Jacques & Tirole, Jean, 1994. "Access pricing and competition," European Economic Review, Elsevier, vol. 38(9), pages 1673-1710, December.
    2. Burness, H Stuart & Patrick, Robert H, 1991. "Peak-Load Pricing with Continuous and Interdependent Demand," Journal of Regulatory Economics, Springer, vol. 3(1), pages 69-88, March.
    3. Armstrong, Mark & Doyle, Chris & Vickers, John, 1996. "The Access Pricing Problem: A Synthesis," Journal of Industrial Economics, Wiley Blackwell, vol. 44(2), pages 131-150, June.
    4. Craven, John, 1985. "Peak-Load Pricing and Short-run Marginal Cost," Economic Journal, Royal Economic Society, vol. 95(379), pages 778-780, September.
    5. Cave, Martin, 1994. "Interconnection issues in UK telecommunications," Utilities Policy, Elsevier, vol. 4(3), pages 215-222, July.
    6. Robert E. Dansby, 1978. "Capacity Constrained Peak Load Pricing," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 92(3), pages 387-398.
    7. Lewis, Tracy R. & Sappington, David E. M., 1999. "Access pricing with unregulated downstream competition," Information Economics and Policy, Elsevier, vol. 11(1), pages 73-100, March.
    8. Crew, Michael A & Kleindorfer, Paul R & Smith, Marc A, 1990. "Peak-Load Pricing in Postal Services," Economic Journal, Royal Economic Society, vol. 100(402), pages 793-807, September.
    9. Armstrong, Mark, 2001. "The theory of access pricing and interconnection," MPRA Paper 15608, University Library of Munich, Germany.
    10. Crew, Michael A & Fernando, Chitru S & Kleindorfer, Paul R, 1995. "The Theory of Peak-Load Pricing: A Survey," Journal of Regulatory Economics, Springer, vol. 8(3), pages 215-248, November.
    11. Michael Carter & Julian Wright, 1999. "Interconnection in Network Industries," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 14(1), pages 1-25, February.
    12. Griffin, James M & Mayor, Thomas H, 1987. "The Welfare Gain from Efficient Pricing of Local Telephone Services," Journal of Law and Economics, University of Chicago Press, vol. 30(2), pages 465-487, October.
    13. Laffont, Jean-Jacques & Tirole, Jean, 1996. "Creating Competition through Interconnection: Theory and Practice," Journal of Regulatory Economics, Springer, vol. 10(3), pages 227-256, November.
    14. Koschat, Martin A & Srinagesh, Padmanabhan & Uhler, Linda J, 1995. "Efficient Price and Capacity Choices under Uncertain Demand: An Empirical Analysis," Journal of Regulatory Economics, Springer, vol. 7(1), pages 5-26, January.
    15. Michael Reutter, 2001. "Regulation and Internet Access in Germany," CESifo Working Paper Series 480, CESifo.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Joan Calzada & Francesc Trillas, 2005. "The interconnection prices in telecomunications: from theory to practice," Hacienda Pública Española / Review of Public Economics, IEF, vol. 173(2), pages 85-125, June.
    2. Joan Calzada, 2007. "Capacity-based versus time-based access charges in telecommunications," Journal of Regulatory Economics, Springer, vol. 32(2), pages 153-172, October.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Joan Calzada, 2007. "Capacity-based versus time-based access charges in telecommunications," Journal of Regulatory Economics, Springer, vol. 32(2), pages 153-172, October.
    2. Joan Calzada & Francesc Trillas, 2005. "The interconnection prices in telecomunications: from theory to practice," Hacienda Pública Española / Review of Public Economics, IEF, vol. 173(2), pages 85-125, June.
    3. Paul Bijl & Martin Peitz, 2009. "Access regulation and the adoption of VoIP," Journal of Regulatory Economics, Springer, vol. 35(2), pages 111-134, April.
    4. Francesca Di Pillo & Livio Cricelli & Massimo Gastaldi & Nathan Levialdi, 2010. "Asymmetry in mobile access charges: is it an effective regulatory measure?," Netnomics, Springer, vol. 11(3), pages 291-314, October.
    5. Ingo Vogelsang, 2003. "Price Regulation of Access to Telecommunications Networks," Journal of Economic Literature, American Economic Association, vol. 41(3), pages 830-862, September.
    6. Kotakorpi, Kaisa, 2002. "Access Pricing and Competition in Telecommunications," Discussion Papers 283, VATT Institute for Economic Research.
    7. Toker Doganoglu & Yair Tauman, 1996. "Network Competition with Reciprocal Proportional Access Charge Rules," Industrial Organization 9611001, University Library of Munich, Germany, revised 21 Nov 1996.
    8. Mark Armstrong & David E.M. Sappington, 2006. "Regulation, Competition and Liberalization," Journal of Economic Literature, American Economic Association, vol. 44(2), pages 325-366, June.
    9. Armstrong, Mark & Sappington, David E.M., 2007. "Recent Developments in the Theory of Regulation," Handbook of Industrial Organization, in: Mark Armstrong & Robert Porter (ed.), Handbook of Industrial Organization, edition 1, volume 3, chapter 27, pages 1557-1700, Elsevier.
    10. Lewis, Tracy R. & Sappington, David E. M., 1999. "Access pricing with unregulated downstream competition," Information Economics and Policy, Elsevier, vol. 11(1), pages 73-100, March.
    11. Inderst, Roman & Peitz, Martin, 2011. "Netzzugang, Wettbewerb und Investitionen," ZEW Discussion Papers 11-025, ZEW - Leibniz Centre for European Economic Research.
    12. Vogelsang, Ingo, 2000. "Regulation of Access to the Telecommunications Network of New Zealand: A Review of the Literature," Working Paper Series 3931, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.
    13. Xie, Li & Kong, Chun, 2023. "The social welfare effect of electricity user connection price policy reform," Applied Energy, Elsevier, vol. 346(C).
    14. Axel Gautier & Manipushpak Mitra, 2008. "Regulation of an Open Access Essential Facility," Economica, London School of Economics and Political Science, vol. 75(300), pages 662-682, November.
    15. Kaniska Dam & Axel Gautier & Manipushpak Mitra, 2007. "Efficient Access Pricing and Endogenous Market Structure," Working Papers DTE 384, CIDE, División de Economía.
    16. David Besanko & Shana Cui, 2019. "Regulated versus negotiated access pricing in vertically separated railway systems," Journal of Regulatory Economics, Springer, vol. 55(1), pages 1-32, February.
    17. Armstrong, Mark, 2001. "The theory of access pricing and interconnection," MPRA Paper 15608, University Library of Munich, Germany.
    18. Paul Bijl & Martin Peitz, 2009. "Access regulation and the adoption of VoIP," Journal of Regulatory Economics, Springer, vol. 35(2), pages 111-134, April.
    19. Douglas C. Turner, 2022. "Access pricing regulation in the U.S. domestic aviation industry," Journal of Regulatory Economics, Springer, vol. 62(1), pages 24-46, December.
    20. Grout, Paul A. & Park, In-Uck, 2004. "Promoting competition in the presence of essential facilities," International Journal of Industrial Organization, Elsevier, vol. 22(10), pages 1415-1441, December.

    More about this item

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bar:bedcje:2003108. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Espai de Recerca en Economia (email available below). General contact details of provider: https://edirc.repec.org/data/feubaes.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.