Taking ABC to Court - a Research note on Cost Oriented Access Prices in Telecom

This paper investigates how and why Activity Based Costing (ABC) has been introduced to the cost based price regulation regime in the telecommunication sector. The study draws on empirical insight from a recent court case between NetCom and the incumbent, Telenor, to identify problems related to cost orientated pricing and how these are attempted solved in the directives. We then explore the relevance of regulator’s argumentation for adopting ABC. It is argued that ABC does not solve the problems faced by the regulator and later on, the court. We then attempt to answer why ABC has still been adopted.