Bill and Keep as the Efficient Interconnection Regime?: A Reply

In a critique of my paper outlining the Central Office Bill and Keep (COBAK) proposal, Wright (2001) offers two sets of conditions under which a COBAK interconnection regime would not lead to optimal utilization. While there could be conditions under which some interconnection regime other than COBAK would lead to higher social surplus measures in very simple models of telecommunications, the critique provides no evidence that these conditions would be empirically significant. This, along with the other considerations explained in the proposal and not considered in the analysis, continue to suggest that COBAK is an appropriate policy recommendation.