November 27, 1996
Policy Analysis no. 264

How to Treat the Costs of Shared Voice and Video Networks in a Post-Regulatory Age

by Alfred Kahn

Alfred E. Kahn is the Robert Julius Thorne Professor of Political Economy, Emeritus, Cornell University and Special Consultant with National Economic Research Associates, Inc. (NERA).

Alfred E. Kahn is the Robert Julius Thorne Professor of Political Economy, Emeritus, Cornell University and Special Consultant with National Economic Research Associates, Inc. (NERA).

Published on November 27, 1996

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p align="center">Table of Contents


Introduction

   2
Prerequisites of Efficient Innovation under the 1996 Telecommunications Act

   5
Application of the Incremental Cost Rule and the Prices of Regulated Services

   7
      The Relationship of Incremental to Stand-Alone Costs

   8
      Distributing the Benefit of Economies of Scope

   11
The Fairness and Efficiency of Competition Under the Proposed Assignment of Investment Costs

   13
The Conflict between Recourse to Cost "Allocations" and the Telecommunications Act

   16
The Commission's Only Correct Course Is to Abandon Its Cost Allocation Proceeding

   19

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