TY - JOUR
T1 - Access pricing and market structure
AU - Domon, Koji
AU - Ota, Koshiro
N1 - Funding Information:
The first draft of this paper was presented at the annual conference of the Japanese Economic Association held in Ritsumeikan University, Japan, in September 1998. We are grateful to Toshihiko Hayashi and two anonymous referees for helpful comments. This paper has been partly supported by a Waseda University Grant for Special Research Project (99A-569).
PY - 2001/3
Y1 - 2001/3
N2 - In telecommunications industries access charge problems are important issues during deregulation. In Japan and the US, deregulation also involves the issue of industrial structures as integration or divestiture of a long-distance sector. This paper analyzes access charge problems by introducing effects of the divestiture on cost functions. We show how the effects influence economic welfare under the integration and the divestiture in the Stackelberg model. The main result is that, without regulation, welfare losses, caused by an effect of double marginalization in the divestiture case, are not crucial when an entrant and a divested long-distance firm can make use of an efficient cost function. We also obtain a relationship between Ramsey access charges and the Efficient Component Pricing Rule.
AB - In telecommunications industries access charge problems are important issues during deregulation. In Japan and the US, deregulation also involves the issue of industrial structures as integration or divestiture of a long-distance sector. This paper analyzes access charge problems by introducing effects of the divestiture on cost functions. We show how the effects influence economic welfare under the integration and the divestiture in the Stackelberg model. The main result is that, without regulation, welfare losses, caused by an effect of double marginalization in the divestiture case, are not crucial when an entrant and a divested long-distance firm can make use of an efficient cost function. We also obtain a relationship between Ramsey access charges and the Efficient Component Pricing Rule.
KW - Access pricing
KW - Divestiture effects
KW - Efficient component pricing rule
KW - Veritical integration
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U2 - 10.1016/S0167-6245(00)00034-2
DO - 10.1016/S0167-6245(00)00034-2
M3 - Article
AN - SCOPUS:0035284735
SN - 0167-6245
VL - 13
SP - 77
EP - 93
JO - Information Economics and Policy
JF - Information Economics and Policy
IS - 1
ER -