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Journal of Regulatory Economics

, Volume 32, Issue 2, pp 153–172 | Cite as

Capacity-based versus time-based access charges in telecommunications

  • Joan Calzada
Original Article

Abstract

The Spanish telecommunications regulator recently introduced a capacity-based access system. Under this regulation, entrants pay a flat charge for the interconnection circuits leased to the incumbent operator and are able to freely use these circuits to provide telecommunications services. This paper determines the optimal capacity-based access charge in the presence of time varying demand and capacity constraints and compares this regulation with the traditional time of use access system. The analysis shows that either type of regulation allows the incumbent to recover its fixed costs and can promote the same pattern of entry. Finally, the optimal capacity-based access charge when the entrant has market power is derived.

Keywords

Telecommunications Capacity-based access charges Peak-load pricing Network regulation 

JEL Classifications

L13 L51 H54 D43 

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Copyright information

© Springer Science+Business Media, LLC 2007

Authors and Affiliations

  1. 1.Departament de Politica EconomicaUniversitat de Barcelona and GPRE-IREABarcelonaSpain

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