• Login
    View Item 
    •   Home
    • Yale
    • Yale Journal on Regulation
    • View Item
    •   Home
    • Yale
    • Yale Journal on Regulation
    • View Item
    JavaScript is disabled for your browser. Some features of this site may not work without it.

    Browse

    All of openYLSCommunitiesPublication DateAuthorsTitlesSubjectsThis CollectionPublication DateAuthorsTitlesSubjects

    My Account

    LoginRegister

    Statistics

    Display statistics

    Untangling Tin Cans on a String: The Difficulty of Regulating Access to Even the Simplest Telephone Exchange

    • CSV
    • RefMan
    • EndNote
    • BibTex
    • RefWorks
    Thumbnail
    Name:
    06_14YaleJonReg85_1997_.pdf
    Size:
    3.638Mb
    Format:
    PDF
    Download
    Author
    Needy, Charles
    
    Metadata
    Show full item record
    URI
    http://hdl.handle.net/20.500.13051/7945
    Abstract
    The Federal Communications Commission recently decided that the price a local exchange carrier charges other carriers for access to its network may recover only long-run incremental costs and a reasonable share of forward-looking common costs. The FCC thereby rejected the "parity pricing" rule recently advocated in this Journal by William J. Baumol and J. Gregory Sidak as the standard for pricing access to the network bottleneck facilities controlled by monopolists. This rule calls for access prices to recover not only the long-run incremental cost but also all other "opportunity costs." These include any monopoly rents and any contributions to imprudent investment that monopolists are collecting in sales of retail services but will lose as a result of providing access. This Article presents evidence that parity pricing is not of general applicability to regulatory policies in the United States. When retail prices are already at efficient levels, the rule recovers the same costs as a traditional pricing model like the FCC plan. Parity pricing therefore is interesting as a replacement for the FCC plan only when retail prices recover substantial monopoly rents or cost inefficiencies. The issue is whether regulators in that situation are more likely to achieve efficient retail prices by setting prices directly after determining incremental costs for numerous services or by setting prices for a few bottleneck facilities to promote competitive entry. Results from the FCC's first formal study of long-run incremental costs show the difficulty of unraveling incremental costs, even when services are provided by the simplest configuration of facilities. The author thus agrees with William B. Tye and Carlos Lapuerta that regulators mandate access to bottleneck facilities as a way of fostering competition, moving retail prices closer to the efficient levels they cannot identify. These goals cannot be achieved by parity pricing because it requires access prices to include the monopoly profits and cost inefficiencies that regulators are trying to eliminate.
    Collections
    Yale Journal on Regulation

    entitlement

     
    DSpace software (copyright © 2002 - 2023)  DuraSpace
    Quick Guide | Contact Us
    Open Repository is a service operated by 
    Atmire NV
     

    Export search results

    The export option will allow you to export the current search results of the entered query to a file. Different formats are available for download. To export the items, click on the button corresponding with the preferred download format.

    By default, clicking on the export buttons will result in a download of the allowed maximum amount of items.

    To select a subset of the search results, click "Selective Export" button and make a selection of the items you want to export. The amount of items that can be exported at once is similarly restricted as the full export.

    After making a selection, click one of the export format buttons. The amount of items that will be exported is indicated in the bubble next to export format.