Access Pricing: a Comparison Between Full Deregulation and Two Alternative Instruments of Access Price Regulation, Cost-Based and Retail-Minus


/ Atualizado em 08.03.2007

Estudo: ''Access Pricing: a Comparison Between Full Deregulation and Two Alternative Instruments of Access Price Regulation, Cost-Based and Retail-Minus''

Autores: 

António Brandão
Paula Sarmento

Data: Maio de 2006

Resumo: In this paper two instruments of access price regulation, cost-based and retail-minus, are compared with the full deregulation hypothesis. For this purpose it is developed a model that considers an upstream monopolist firm that sells a vital input to an independent firm and to a subsidiary firm in the downstream market. The main conclusion of the paper is that retail-minus regulation avoids foreclosure and leads to better results than cost-based regulation in terms of investment level and consumer surplus. Moreover, retail-minus regulation allows a higher consumer surplus than deregulation of access price as long as the regulator carefully defines the retail minus instrument.


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