Setting access prices: A critique of the ACCC’s approach in telecommunications

Henry Ergas

Agenda - A Journal of Policy Analysis and Reform, 2008, vol. 15, issue 4, 35-60

Abstract: Any access-system prices in multi-service networks must meet two constraints. Firstly, ‘the multi-service adding-up constraint’; that is, the sum of the regulated access charges across the range of services provided by the network must be no less than the amount which would the cover the costs of the network. Secondly, an inter-temporal or time-consistency constraint, under which the present value of the expected path of access charges over time must be no less than the initial cost. This paper argues that neither constraint is met by the access prices the ACCC has set in telecommunications.

Date: 2008
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