Local and Long-Distance Network Competition

28 Pages Posted: 17 Jan 2000

See all articles by Michael Carter

Michael Carter

University of Canterbury - Economics and Finance

Julian Wright

National University of Singapore (NUS) - Department of Economics

Date Written: December 22, 1999

Abstract

We develop a model of competition between interconnected networks, with separate local and long-distance markets, allowing for various degrees of symmetry between carriers. Assuming two part pricing, we show that effective competition can be achieved with simple regulations involving mandatory interconnection and reciprocal access charges. We find that not only will interconnected local networks want to agree on cost based interconnection charges, but that through competition for local market shares they will also solve the familiar one-way access pricing problem between local providers and long-distance competitors. We analyze the implications of allowing for integrated firms and non-reciprocal access agreements in our model.

JEL Classification: D43, K21, L41, L43, L51, L96

Suggested Citation

Carter, Michael and Wright, Julian, Local and Long-Distance Network Competition (December 22, 1999). Available at SSRN: https://ssrn.com/abstract=201977 or http://dx.doi.org/10.2139/ssrn.201977

Michael Carter

University of Canterbury - Economics and Finance

Private Bag 4800
Christchurch
New Zealand

Julian Wright (Contact Author)

National University of Singapore (NUS) - Department of Economics ( email )

AS2 Level 6, 1 Arts Link
Singapore 117570
Singapore
6568743941 (Phone)
6567752646 (Fax)

HOME PAGE: http://profile.nus.edu.sg/fass/ecsjkdw/

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