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Network Access Regulation and Competition Policy: An Assessment of the “Direct-Plus-Opportunity Cost” Regime and Policy Options

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Abstract

A fundamental issue when determining competition policy, especially in vertically integrated industries, is the formulation of interconnection charges. Recently an influential set of theories on network access price has been put forward under the broad heading of “direct-plus-opportunity cost regime” (DOCR). This paper deals with two distinct but related aspects of DOCR. The first part of the paper considers the policy implications of an access regime determined by DOCR. Its compatibility in attaining contestable outcomes in the final goods market and its effect on welfare gains, especially producer's surplus, are evaluated. Secondly, the paper empirically applies a version of DOCR to the UK contract gas market, and the simulated outcomes and possible scenarios are considered.

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  1. Economics Department, Middlesex University Business School, The Burroughs, London, NW4 4BT

    Joshy Z. Easaw

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  1. Joshy Z. Easaw
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Easaw, J.Z. Network Access Regulation and Competition Policy: An Assessment of the “Direct-Plus-Opportunity Cost” Regime and Policy Options. Empirica 27, 133–156 (2000). https://doi.org/10.1023/A:1026576313739

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  • DOI: https://doi.org/10.1023/A:1026576313739

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