Abstract
This paper presents an overview of optimal pricing rules for telecommunication public utilities. The optimal two part tariff is characterized in a model which accounts for two types of externalities (network externality and benefit of an incoming call to the recipient). The optimal nonlinear pricing rule is also analysed and it is shown that this nonlinear schedule is equivalent to a system of degressive optional two-part tariffs. The model is extended to the case where several quality levels are proposed to potential users.
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