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Business Data Services (BDS), formerly called special access services, are dedicated broadband lines offered by network providers to business customers and network providers. In a packet-based broadband network, the distinction between customer and competitor is being blurred, and with it the meaning of the wholesale/retail distinction. A new approach to pricing and regulatory oversight is needed that moves away from treating any market segment as passive purchasers of BDS services. The authors propose a simple pricing structure that is cost-causative, reflects the opportunity cost of using the network, and controls opportunistic behavior. While the main focus of the paper is on BDS services, the recommendations also hold in other networks industries.

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Victor Glass

Victor Glass

Rutgers Business School

Victor Glass is Director, CRRI Scholar, and Professor of Professional Practice - Finance and Economics, Rutgers Business School - Newark and New Brunswick, Rutgers University. Prior to joining Rutgers, Dr. Glass was Director of Demand Forecasting and Rate Development at...

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Timothy Tardiff

Timothy Tardiff

Advanced Analytical Consulting Group

Timothy J. Tardiff is a Principal at Advanced Analytical Consulting Group (AACG). He received his B.S. in mathematics from the California Institute of Technology and his Ph.D. in social science from the University of California, Irvine. He has more than 30 years of...

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