Contenu du sommaire : L'économie des télécommunications

Revue économique ECONOMETRIC MODELS OF TELECOMMUNICATIONS FIRMS : A SURVEY ferenc Kiss, bernard lefebvke The 15-year history of aggregate econometric models of American and Canadian télécommunications firms is outlined. Nearly forty models of AT&T and Bell Canada are examined in some détail. The survey concludes that thé econometric models succeeded in producing robust empirical évidence on fundamental économie characteristics of télécommunications firms, such as those associated with factor demand, factor substitution, économies of scale and technological changes. Attention is drawn to thé économie similarities of AT&T and Bell Canada. The most impor­tant failure of thé surveyed econometric models is identified as their inability to quantify various forms of internai économies. Expected directions of future research are described. THE THEORETICAL APPROACH TO PRICING AND COST ALLOCATION FOR TELECOMMUNICATION SERVICES david encaoua., michel moreaux This paper reviews some économie principles concerning pricing policy and cost allocating methods in télécommunications. It focuses on thé links between sustai-nable market priée equilibria and public pricing rules. The first part is devoted to questions of allocative efficiency and equity. Allocative efficiency is investigated under thé second best analysis framework, while equity is related to thé search af some cross subsidy free priées. Average cost pricing rules in thé case of multi-product activities are also investigated. The second part is devoted to properties of non uniform priées and gives some numerical simulations of welfare gains associated to différent pricing rules. TELEPHONE ACCESS AND USAGE : JOINT MODELIZATION AND OPTIMAL PRICING nicolas curien An integrated micro-économie modelization is developped, in order to discuss thé main characteristics of téléphone demand and to dérive optimal pricing rules. Téléphone demand is described as a joint demand for two commodities : (i) optional usage (made possible by access to thé network), and (ii) actual usage. It is shown that expectations of future usage do influence individual décisions of access and network equilibrium. Revenues of thé télécommunication firm and user's surplus are calculated at equilibrium, disclosing thé positive externality which is brought to thé existing subscribers when a new one is connected. There also exists a usage externality due to thé utility yielded by incoming téléphone calls. Making simple assumptions on network costs, thé impact of thé access and usage externalities on optimal pricing is discussed : first and second best priées are successively examined and compared to thé priées which would be set by a profit maximizing unregulated monopoly. 550

The econometric modeling of telephone access in France In this paper, we present the econometric models for forecasting the telephone access demand that have been used in France since 1964. Three types of models were developped according to the kind of growth the telecommunications successively experienced. During the 5th and the 6th Plan (1964-1974) the supply shortage was impressive and the models could not do much more than evaluate the gap between the French equipment and international standards, and prescribe a development meeting the financial constraints. Since 1974 the data and the models have been broken down into business and residential markets ; the household model was designed to explain the surge of demand provoked by the growth of supply. Accurate estimates of price-elasticities were required in order to monitor this development, to lirait the number of orders in hand, and to keep the waiting time within 2 years. Now, the rate of equipment for the residential market is over 90 % ; the diffusion process has been followed by a different kind of evolu­tion : the demand for connection is triggered by a wish for better quality and confort. Accordingly the models emphasize business equipment and residential second line ; they attempt to explain how the subscribers optimize their equipment in order to achieve a given grade of service in terms of blocking rate for their traffic (telephone calls and data transmission).

Econometric models of telecommunications firms : a survey The 15-year history of aggregate econometric models of American and Canadian telecommunications firms is outlined. Nearly forty models of AT&T and Bell Canada are examined in some detail. The survey concludes that the econometric models succeeded in producing robust empirical evidence on fundamental economie characteristics of telecommunications firms, such as those associated with factor demand, factor substitution, economies of scale and technological changes. Attention is drawn to the economi similarities of AT&T and Bell Canada. The most important failure of the surveyed econometric models is identified as their inability to quantify various forms of internal economies. Expected directions of future research are described.

The theoretical approach to pricing and cost allocation for telecommunication services This paper reviews some economie principles concerning pricing policy and cost allocating methods in telecommunications. It focuses on the links between sustainable market price equilibria and public pricing rules. The first part is devoted to questions of allocative efficiency and equity. Allocative efficiency is investigated under the second best analysis framework, while equity is related to the search af some cross subsidy free prices. Average cost pricing rules in the case of multi-product activities are also investigated. The second part is devoted to properties of non uniform prices and gives some numerical simulations of welfare gains associated to different pricing rules.

Telephone access and usage : joint modelization and optimal pricing An integrated micro-economie modelization is developped, in order to discuss the main characteristics of telephone demand and to derive optimal pricing rules. Telephone demand is described as a joint demand for two commodities : (i) optional usage (made possible by access to the network), and (ii) actual usage. It is shown that expectations of future usage do influence individual decisions of access and network equilibrium. Revenues of the telecommunication firm and user's surplus are calculated at equilibrium, disclosing the positive externality which is brought to the existing subscribers when a new one is connected. There also exists a usage externality due to the utility yielded by incoming telephone calls. Making simple assumptions on network costs, the impact of the access and usage externalities on optimal pricing is discussed : first and second best priees are successively examined and compared to the prices which would be set by a profit maximizing unregulated monopoly.

Telecommunication services: technical integration and economic differenciation In response to the growth of various telecommunication services in France, several dedicated networks were introduced in the recent past. In order to avoid the inefficiency due to duplicated Systems, the tendance is now to develop a universal network. However, the counterpart of such an integration is « adverse selection » : in the absence of price differenciation, the network might not to be able to attract some types of usage which could be efficiently gathered in. The coexistence of a public shared network and private leased lines (i.e. Unes dedicated to pairs of subscribers) raises the same type of issue : the pricing scheme may incite subscribers to prefer a private Une rather than the network, although social efficiency would prescribe to use the network. The above issue will be emphasized through simple theoretical models and pricing rules will be proposed, which lower the effects of adverse selection.

Regulation and deregulation of the telecommunication industry: from the american and british experiences to a possible evolution in France This paper focuses on the regulation and deregulation experiences in the american and british telecommunication industry, in relation to the prospects for this sector in France. After a long period of regulated cartel in the United States until the 60's, a continuons transition toward a more competitive environment is under way ; regulatory islands remain and huge contradictions sometimes appear. The american experience is explained here by the means of an historical analysis of the telecommunication industry over the past century. In the United Kingdom, the evolutionary process is mainly guided by political imperatives and has different objectives. These reflect both the preference of policy makers to promote the private holding of capital and the State's needs for those financial ressources which privatization is likely to satisfy. Yet, it is argued that privatization has not eliminated the necessity to define a new regulatory framework. In France, in contrast to the foregoing cases, there has only recently been a will to rectify some distortions of public monopoly. The present regulatory framework and current debates are described : alternative environment scenarios for the future of this french sector are finally suggested, by learning from the anglo-saxon experiences.

From the theory of industry structure to the economics of telecommunication networks The theoretical notions of efficiency, contestability, and sustainability of an industry structure are recalled. The application of the latter concepts is then discussed. It is argued that the cost function which is relevant to the analysis of the industry and the one which can be derived from econometrics are generally different. Moreover, as will be emphasized, the cost function is influenced by the structure of the industry through changes in technology and priees of inputs. Rather than a global study of the cost function, our analysis is an attempt to understanding in depth the economies of the network. The classical distinction between local and toll services does not prove to be very useful and will be replaced by the one between two fundamental functions in the network : circuit routing through trans­mission facilities, and traffic routing through switching equipments. On the basis of the economie characteristics of these two functions, it is prescribed that deregulation in France should only extend to traffic routing and should preserve the trans­mission network as a whole, i.e. trunk circuits as well as local loops : restricting the scope of monopoly to local operations only, as in the United States, would indeed cause a costly loss of scale economies and lead to a socially intolerable deavaraging of access charges.