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Using 'Bill and Keep' Interconnect Arrangements to Soften Network Competiti on

Joshua Gans () and Stephen King ()

No 739, Department of Economics - Working Papers Series from The University of Melbourne

Abstract: This paper demonstrates that low (below marginal cost) interconnect or access charges can be used to sustain high subscription prices in an environment of network competition with two-part tariffs and price discrimination. This result stands in contrast to other results in the literature suggesting that high interconnect charges can play a collusive role.

Keywords: MONOPOLIES; TELECOMMUNICATIONS; COMPETITION (search for similar items in EconPapers)
JEL-codes: L41 L96 (search for similar items in EconPapers)
Pages: 12 pages
Date: 2000
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Journal Article: Using 'bill and keep' interconnect arrangements to soften network competition (2001) Downloads
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