Revenue-Sharing Regulation of Interconnection Charges

  • Kim, Jeong-Yoo (Department of Economics Dongguk University) ;
  • Lim, Yoon-Sung (Department of Economics Dongduk Women's University)
  • Published : 2000.05.01

Abstract

In this paper, we explore the economic principle behind the revenue-sharing rule for interconnection charges. First, we assert that firms can collude by splitting tile revenues equally i.e., choosing the revenue-sharing ratio equal to l/2. Also, we characterize the optimal revenue-sharing ratio in a model of horizontal interconnection and discuss the relation between the optimal ratio and the optimal access price.

Keywords