We reconsider the question of the optimal level of termination fees between communication networks in the context of heterogeneous usage and elastic participation. The interaction between these two features yields new insights; in our model: i) The profit maximizing reciprocal termination fee is...

We provide an efficiency justification for the imposition of the uniform pricing constraint in universal service obligations (USO), where USO are defined as a set of constraints imposed on firms belonging to a network industry. In addition to the uniform pricing (UP) constraint, which is an...