Competition in telecommunications

This paper discusses the scope for competition in the telecommunicationsindustry, taking into account the features of natural monopoly,network externalities, and customer inertia. Recent policy towardscompetition in the industry in the UK is surveyed, with an emphasison access pricing and interconnection. Finally, recent theoreticaldevelopments in the economics of access pricing and interconnectionare discussed and shown to lend some support for aspects ofcurrent policy in the UK.