Research On The Interconnection Access Price Of Chinese Telecommunication Industry

Relaxing regulation and introducing market competition are the important content of global telecommunication reform from 1980s when U.S.A. and Europe began the reform in order to lead the competition. Because of the inherent characteristic in technology and economy of telecommunication, it is determined that its effective competition's requirement is equal interconnection. However, the free interconnection among the competitive networks may produce the use and control of the resources of the bottleneck, reduce the efficiency of the competition, and hinder the forming of effective competition of telecommunications. Therefore, it's the key that set up a interconnection regulation that can give consideration to benefit of all interconnection enterprises, maximize network efficiency and social utility at the same time. It's not only a extremely realistic key problem to promote rapid and healthy development of the telecommunications industry, but also has great theoretical significance to coordination and balance interconnection interests of general network industries.The foreign scholar design abundant studies to the incentive regulation of interconnection, and have put forward a lot of very meaningful theories and methods. The domestic scholar's study stays on the enlightenment of the network industry's structure reform of our country in the encouraging structure reform experience of the west on this problem, lacking the systemic analysis of access price formation, model designed by cost-based combined with price-based way even. On the basis of existing research results, through analyzing the formation of access price, the text think that access price is benefits zone between participators, which should combine average incremental cost and average incremental revenue in order to make sure equity distributed revenue and cost, make every effort to make the brand-new explanation of the interconnection access pricing mechanism.The text contents six chapters, chapter one is an introduction, mainly introduces the telecommunication industry of our country and the problem existing in the telecom interconnection at first. Then go on, reviewing the research on access price, stating the meaning, principle, way, terms, structure performance of access price, finding that there are three problems exist in recent research: 1. Access pricing is the focus of interests contradictions and conflicts for all parties involved in the interconnection, which concerns every party and its users, as well as regulatory agencies, to be a comprehensive account of the cost, revenue, demand, competition, market structure, terminal price, the efficiency of regulation and many other factors. But the existing literature often just analyzes the forming principle of access price in terms of single factor but not systematic and comprehensive analysis.2. The relationship between telecomm access price and terminal price actually is the relationship of product price between upper company and downstream company, is the relationship between wholesale price and retail price. Therefore, the determination of access price should consider both cost and the bound of terminal prices. However, the existing literature on access price, or based solely on cost, or price-based, can not combine this two factors. 3. The research on access price has close interdynamic relations with government regulation system, the competitive policy and route of telecommunication, so the study on this problem can't breaks away from its background of policy. In existing research, there have been gotten extensive concern on access price which combines the practice and policies of telecommunication regulation in west countries. But there are few researches on core problem of our telecommunication reform interconnection, lacking relative research which combines relevant policy and background of our country telecommunication reform, to analyze access price regulation and put forward operable countermeasures and suggestions. Finally, introducing the key proposition, main content, research approach, innovation and deficiency of this thesis.Chapter two reviews and comments the telecommunication industry and interconnection theory., studies the meaning key element of the telecommunication network and characteristic of network industry of the telecommunication industry at first. On this basis, further analyzes the characteristics of telecommunications as the network industry which include technical, economic and social characteristics, the technical features include the vertically integrated structure, the whole network compatibility, as well as joint operations, the economic characteristics include the cost and effectiveness two parts, social characteristics embody as the basic status in national economy and welfare specialty. On the basis of that, explaining the meaning and ways of interconnection, elucidating the background of it from technical, economic and social factors, analyzing the existing problems of it from technical, service quality, monitoring and access pricing, through the comparative study of countries' interoperability solutions and the rule , put forward that access price as the focus of all parties' interests, is still a pending problem worldwide.Chapter three focuses on the formation mechanism of access pricing, explains the position and role of interconnection access price in the price system of telecomm firstly, on the basis of comprehensive decrypting of the constitution of telecomm price system, puts forward that access price has impact on people's livelihood and telecomm operators' destiny , the cost distribution and revenue sharing of access pricing would have affected the overall situation and an important impact on the future. The text then compares and analyzes the three current way of access pricing, namely, bill and keep, price-based pricing and cost-based pricing, considers that bill and keep is a simple and ideal settlement on the base of equal traffic flux, price-based method can avoid information asymmetry to a certain extent, but has the potential to distort the access prices, cost-based method based can reflect the contribution of the parties and the use of resources to a certain extent, but the requirements on cost data are more stringent and method of calculation is more complicated , we should combine cost-based and price-based method. Finally, the text comprehensively explains the formation mechanism of access price from the cost of access pricing, the form of terminal price, market demand, enterprise's competitive behavior, market structure of telecom industry and the regulator of access price, considers that long-term incremental cost pricing for the basic orientation and full distributed cost pricing for alternative and complementary is more suitable way for the condition of our country, the way of terminal price takes price-cap regulation is suited to China's telecom industry, as well as in the development of the telecomm market in China's current three-stage oligopoly, In order to avoid undue competition or corporate conspiracy, we should regulate access price.Chapter four analyzes the cost and revenue of telecomm network on the basis of the explained formation mechanism of access price. The text considers that network cost is the important base for determining the reasonable access price, the cost calculating should follow the non-binding, forward-looking, as well as the principle for China's national conditions three principles. On the basis of comparative analyzes the advantages and disadvantages of three international commonly used methods of measurement, that is, top-to-bottom, bottom-to-up and outside-to-inside, points out that the bottom-to-up method is more suitable for the status quo of China's telecom industry, and illustrated by examples of interconnection of the actual process of cost estimation. Then the text studies the interconnection revenue, considers that it's another important factor to determine access price. The text introduces the three major networks' value law and analyzes the different interconnection value under these laws, explains the distributing way of Selten principle in equitable distribution of income.Chapter five Based on average incremental cost and average incremental revenue, constructs the model of interconnection access pricing C|-≤a< I|-(P) in the principle of Selten equitable distribution theory. Further analyzes the formation of the terminal price, advocates that price cap regulation be the terminal price model, normal return on revenue to adjusting terminal price. The text compares price-based method, cost-based method and single-factor method on the ground of qualitative summarizing the four characteristics of the model designed in this text, considers that it can be better reflect the interests of all the participator, promote the regulatory agencies from direct regulation to incentive regulation changes, make possible provision for diversify interconnection charges in the 3G era, make the society get more welfare.Chapter six points out that the design of incentive regulation of interconnection access pricing is systemic. In order to guarantee the benign operation of the incentive regulation of telecommunication industry, avoid seeking rent and capturing, we need to accelerate the construction of institutional environment of the regulation. On the basis of analyzing western countries' relevant theories and experiences, we point out that our country should dispel the administrative monopoly, set up the authorized independent structure mechanism of laws and regulations. Our organization should adopt tactics step by step, separate the Ministry of Information Industry from government organ and let it has the independent supervisory function of the system at first, disperse price supervising, formulation, policy-making power to other government departments to regain, and incorporate into independent Ministry of Information Industry and responsible for carrying out in unison. Secondly, defining the main body of supervision department of prices is an independent telecommunication regulator. Seeing that the lack promise of organization might initiate weak investment question of " structure extort" and" ratchet wheel effect", we point out that the principle basis of solving lack promise problem is to set up independent structure organization of " politicizes " in accordance with the law. Avoid its behavioral random and abusing the right at the same time, need to improve relevant systems of laws and regulations, strengthen commitment mechanism of the industry structure organization of natural monopoly of our country.