Interconnection Pricing, Stranded Costs, and the Optimal Regulatory Contract

Steven S Wildman

Industrial and Corporate Change, 1997, vol. 6, issue 4, 741-55

Abstract: Given the potential for strategic gaming inherent in network providers' reliance on their competitors for the supply of vital inputs, interconnection pricing or the setting of prices at which networks sell access to their facilities and their customers to other networks has become a critical issue in the design of policies to promote competition in telecommunications markets. Debate has focused on the prices entrants should pay for access to the facilities and customers on the incumbent local exchange carriers (ILECs) who until recently were protected monopolies. A critical question is the size of the contributions competitors should make to incumbents' fixed costs and regulatory burdens in the prices they pay for network elements and services purchased from ILECs. Copyright 1997 by Oxford University Press.

Date: 1997
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