Pricing Network Interconnection: Advantages Held by Integrated Telecom Carriers |
| |
Authors: | Email author" target="_blank">Clement?G?KrouseEmail author Elke?Krouse |
| |
Institution: | (1) Department of Economics, University of California Santa, Barbara, CA;(2) Industry and Managerial Economics, Santa Barbara, CA |
| |
Abstract: | A recurring telecommunications policy debate centers on whether incumbent, vertically integrated local exchange carriers have an incentive to discriminate in price against down-stage service rivals who interconnect to their network (a price squeeze). The concern is typically voiced in one of two claims: (1) there is an incentive for an incumbent to use a price squeeze when access prices are set above long-run incremental cost; or (2) prices set at that cost are preferred for interconnection because they eliminate incentives for a price squeeze. In principle, form (1) is generally true (Proposition 1), but form (2) is generally not (Proposition 2), The proof of these Propositions reveals why pricing access at long-run incremental cost coupled with appropriate price floors in the down-stage market does eliminate the incentive to squeeze. |
| |
Keywords: | Interconnection pricing telecommunications vertical integration |
本文献已被 SpringerLink 等数据库收录! |
|