Analysis of a pricing method for elastic services with guaranteed GoS

Service Providers (SPs), which offer services based on elastic reservations with a guaranteed Grade of Service (GoS), should know how to price these services and how to quantify the benefits in different scenarios. This paper analyzes a method for evaluating the price of a service based on elastic reservations with a guaranteed Grade of Service. The method works as follows: First, the SP determines the requirements of the service that wants to offer; Second, the SP evaluates the average rate of the accepted elastic reservations of the service with a guaranteed GoS; Third, the SP calculates the price that guarantees the GoS with an aggregate demand function that depends on a demand modulation factor of the elastic reservations that is the mean reserved bandwidth, Bres; and Finally, the SP obtains the optimum value of the elasticity of the reservations that gives the maximum revenue, and the required access bandwidth in this case. The paper not only applies the method to a class i of elastic reservations when a linear-based demand and a revenue function are selected, but it also analyzes the influence of each one of the considered parameters. This method could be extended to the case of multiple classes of independent and guaranteed elastic services, applying the method to each service with its estimated demand and revenue functions.Peer ReviewedPostprint (published version

Regulatory reforms of European network industries and the courts

Regulatory reforms in European network industries are strongly influenced by legal decisions. The cases considered in this paper not only initiated the liberali-zation process of the markets for network services but also provided an impor-tant signaling function for the remaining regulatory problems: localization of network-specific market power, abolishment of grandfathering rights, ex ante regulation of network-specific market power instead of negotiated unregulated network access, incentive regulation instead of cost-based regulation. The process towards sector-symmetric market power regulation based on economi-cally founded principles gains increasing relevance. Nevertheless, there are fur-ther reform potentials to be exhausted in the future. --

Collateralised loan obligations (CLOs) : a primer

The following descriptive paper surveys the various types of loan securitisation and provides a working definition of so-called collateralised loan obligations (CLOs). Free of the common rhetoric and slogans, which sometimes substitute for understanding of the complex nature of structured finance, this paper describes the theoretical foundations of this specialised form of loan securitisation. Not only the distinctive properties of CLOs, but also the information economics inherent in the transfer of credit risk will be considered, so that we can equally privilege the critical aspects of security design in the structuring of CLO transactions

Controlling Costs and Increasing Access to Prescription Drugs: State and Federal Solutions

Spending on health care in the United States continues to increase rapidly, consuming a greater share of the total economy each year. Over the past decade, prescription drug spending has been the fastest growing component of health care expenditures both nationwide and in Washington state. The federal government, state governments, individuals and employers all pay for prescription drugs, and everyone is affected by rising costs. While it is true that overall drug prices have gone up, and in many cases at more than triple the rate of inflation, price increases alone do not account for the drastic increase in spending on pharmaceuticals. The three biggest cost drivers, in order, are:1) the average person fills more prescriptions than ever before (increased utilization),2) new classes of drugs arrive on the market in high demand and at high prices, and3) pharmaceutical companies hike prices on existing drugs. Double-digit increases in total prescription drug costs create two interrelated problems. First, higher prices mean less access for uninsured individuals, and often a difficult choice for the poor: to treat or eat? Second, increased drug spending forces state governments to face a similar choice: to continue funding drug coverage for seniors, the disabled and others at escalating prices and pay for it by cutting teacher salaries, raising taxes, and underfunding firehouses, or to roll back drug benefits and eligibility for already vulnerable groups? While Congress has thus far failed to pass Medicare prescription drug or generic drug legislation, and the executive branch has taken a hands-off approach, the states have taken the lead in designing innovative policies to reduce manufacturer prices and expand access to necessary drugs. Legislation in Washington state, debated in 2002 and expected to be reintroduced in 2003, would allow the state to evaluate the benefits and costs of various and competing prescription drugs, negotiate price discounts for the best-value drugs, and pass the savings on to those who lack prescription drug coverage. Allowing the state to shop smarter is a sensible, near-term way for Washington to address the related problems of access and cost. Furthermore, an emerging consensus among states may drive more fundamental policy changes at the federal level

Telecommunications markets in the stranglehold of EU regulation: on the need for a disaggregated regulatory contract

The increasing complexity of EU regulation is resulting in a tangle of contradictory decisions and statements, involving also new markets, such as interactive cable television, Internet etc. Whereas in the past sector-specific regulation has been applied in a discretionary manner in order to correct the rules of the market game, the really challenging task for the future seems to be the development and implementation of statu- tory constraints for the regulatory authorities in order to guarantee a predictable regulation of market power. For this purpose the design and implementation of a disaggre- gated regulatory contract on the statutory level (EU Directives and national law) is derived, which should be an essential principle in the EU Review 2006. Its basic components consist of limiting regulation to monopolistic bottlenecks, exploiting the phasingout potentials, and a disaggregated application of regulatory instruments. In con- trast, the problem of opportunistic regulatory behaviour with respect to irreversible investments can be solved by the application of the already existing statutory constraint of the Framework Directive guaranteeing financial viability. --

Modelling welfare effects of a liberalisation of the Dutch electricity market

The Dutch electricity sector has traditionally been dominated by the public sector. Although this organisational structure resulted in a reliable and low-priced system, it is said not to be completely stable and efficient. National and international developments stimulate the introduction of a liberalised system. In this article, we present the model NEDMOD which is used to estimate possible welfare gains of an implementation of a liberalised market system in the Dutch electricity market

Federal Home Loan Bank mortgage purchases: Implications for mortgage markets

The Federal Home Loan Bank (FHLB) System is a government-sponsored enterprise created by Congress to support residential housing finance. Historically, the twelve regional wholesale banks that constitute the FHLB System have pursued this goal by making loans to their depository institution members secured by residential mortgage loans. In 1997, however, the Federal Home Loan Bank of Chicago began purchasing pools of conforming mortgages under its Mortgage Partnership Finance Program. Today, nine FHLBs offer this program, and the remaining three offer their own Mortgage Purchase Programs. ; The FHLB mortgage programs represent a small but growing part of the secondary conforming mortgage market, which has traditionally been dominated by the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac). This article examines the various FHLB mortgage programs offered, analyzes the evolving competitive environment in the secondary conforming mortgage market, and identifies implications for this market. ; Consumers could ultimately benefit from lower mortgage costs because of a lower cost of guaranteeing mortgage credit, the author contends, but the savings per borrower would likely be small. He also notes that increased competition may reduce the franchise value of Fannie Mae and Freddie Mac, in turn possibly increasing risk-taking incentives for these firms. The author concludes that the evolution of this competitive landscape bears close attention as it could have important implications for mortgage markets.Federal home loan banks ; Mortgage loans

International roaming in the EU : current overview, challenges, opportunities and solutions

As technology evolves and globalization continues, the need for reasonably priced roaming services has never been higher. In 2007, the European Commission (EC) introduced a first set of regulatory decisions to cap the maximal roaming fee end users have to pay for voice services. In the years after, additional price caps have been introduced for SMS and data, initially only for end users, in a later stage also for the wholesale tariff. The final step, Roaming Like at Home (RLAH), will start to take effect in June 2017; from then on end users will pay the same price (for voice, SMS and data) when roaming like in their domestic country. The effect of RLAH on the business case of each mobile operator is hard to predict, as the different national markets are extremely heterogeneous and operators face large discrepancies in terms of roaming usage and network costs due to different travelling patterns and various other reasons that cannot be harmonized (geography, economics, working force, usage history, etc.). Furthermore, competition in the telecom market will no longer be a purely national matter, as the decision to abolish roaming tariffs will fully open up cross-border competition. This paper aims at providing insights in the effect of RLAH for both the end user as well as the mobile operators. Following a literature survey approach, including an overview of the roaming regulation process from 2007 up to now, the paper discusses possible effects the RLAH initiative might trigger, going from lower wholesale prices for mobile operators to higher retail prices for end Users. Additionally, as the European Commission strives for a digital single market, this paper presents a number of technical solutions (carrier portability, software-based SIMs, cross-border IMSI, Roaming like a Local, Wi-Fi offloading) that may pose a - partial or full - alternative for roaming and explains how these may impact cross-border competition both positively and negatively. The solutions are assessed against two axes: (1) generating the best possible outcome for the end customers (in all countries) and (2) ensuring the best level playing field for (virtual) mobile operators in Europe, which will of course involve trade-offs on different levels

Trade Promotion Authority (TPA): Frequently Asked Questions

Legislation to reauthorize Trade Promotion Authority (“TPA”), sometimes called “fast track,” was introduced as the Bipartisan Congressional Trade Priorities and Accountability Act of 2015 (TPA- 2015; H.R. 1890/S. 995) on April 16, 2015. The legislation was reported by the Senate Finance Committee on April 22, 2015, and by the House Ways and Means Committee the next day. TPA, as incorporated into H.R. 1314 by substitute amendment, passed the Senate on May 22 by a vote of 62-37. In the House of Representatives, the measure was voted on under a procedure known as “division of the question,” which requires separate votes on each component, but approval of both to pass. Voting on June 12, TPA (Title I) passed by a vote of 219-211, but TAA (Title II) was defeated 126-302. A motion to reconsider that vote was laid by Speaker Boehner shortly after that vote. The previous grant of authority expired on July 1, 2007. TPA requires that if the President negotiates an international trade agreement that would reduce tariff or non-tariff barriers to trade in ways that require changes in U.S. law, the United States can implement the agreement only through the enactment of legislation. If the trade agreement and the process of negotiating it meet certain requirements, TPA allows Congress to consider the required implementing bill under expedited (“fast track”) procedures, pursuant to which the bill may come to the floor without action by the leadership, and can receive a guaranteed up-or-down vote with no amendments. Under TPA, an implementing bill may be eligible for this expedited consideration if (1) the trade agreement was negotiated during the limited time period for which TPA is in effect; (2) the agreement advances a series of U.S. trade negotiating objectives specified in the TPA statute; (3) the negotiations were conducted in conjunction with an extensive array of required notifications to and consultations with Congress and other stakeholders; and (4) the President submits to Congress a draft implementing bill, which must meet specific content requirements, and a range of required supporting information. If, in any given case, Congress judges that these requirements have not been met, TPA provides mechanisms through which the eligibility of the implementing bill for expedited consideration may be withdrawn in one or both chambers. The most recent previous renewal of TPA covered agreements reached between December 2002 and the end of June 2007. Current legislation would apply to agreements reached before July 1, 2018, with a possible extension to July 1, 2021. The United States is now engaged in several sets of trade agreement negotiations. Legislation to reauthorize TPA was introduced, but not considered, in the 113th Congress. The issue of TPA reauthorization raises a number of questions regarding TPA itself and the pending legislation. This report addresses a number of those questions that are frequently asked, including the following: What is trade promotion authority? Is TPA necessary? What are trade negotiating objectives and how are they reflected in TPA statutes? What requirements does Congress impose on the President under TPA? Does TPA affect congressional authority on trade policy