Munich Personal RePEc Archive

Access pricing, bypass and universal service in post

Armstrong, Mark (2006): Access pricing, bypass and universal service in post.

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Abstract

An incumbent postal service provider faces two issues which make the design of efficient access pricing especially difficult. First, universal service obligations, together with the presence of significant fixed costs, require retail prices to be out of line with underlying marginal costs. Second, competing firms may be able to bypass the incumbent's delivery network. Within a simple framework, this note analyses how access charges should best be set in the light of these twin constraints.

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