Framework for Assessing the Economic Efficiencies of Long-Run Network Pricing Models

This paper presents a framework for assessing the economic efficiency of different long-run network pricing models. The aim is to provide a quantifiable efficiency measure that will inform regulators, network operators, and network users when an alternative pricing model is contemplated. The efficiency measure is derived from the long-term network development costs that flow from a dynamic interaction between network pricing and planning; that is the response of network users to differing charging models, the consequential network investment, and new financial incentives that follow reinforcement of the network.