THE ACCESS PRICING PROBLEM WITH DEREGULATION - A NOTE

This note extends the analysis of Armstrong, Doyle and Vickers [1996] to the case of retail price deregulation. It is shown (i) that the opt imal access price may be above, below, or (in the linear case) equal t o marginal cost, (ii) that optimal regulation of the margin between th e retail price and the access price entails the ECPR, and (iii) that w elfare and entrant profit are higher when the level of the access pric e, rather than the margin, is regulated.