Economically Appropriate Rents for

Crown Land with Pre-existing Broadcast

Towers
A Report on behalf of Broadcast Australia

Joshua Gans

The analysis here represents the views of CoRE Research Pty Ltd
(ACN 096 869 760) and should not be construed as those of
Broadcast Australia.

May 2005
 Executive Summary
In its review of rentals for Crown land communications tower sites, IPART is considering
rental fee methodologies that (i) apply rents to co-users as well as primary users of sites and (ii)
that are adjusted for the ‘strategic’ importance of sites. In so doing, it is proposing rental
methodologies that are not purely based on cost. That is, the rents may have a premium
attached to them above the value of the next best alternative use of the land.

The idea that rents should be paid by co-users as well as primary users is not justifiable from an
economics perspective. First, co-users cannot generate any value from use of the land if the
primary user’s tower (and related activities) is not present. Hence, those functions are strict
complements and so charging co-users represents a direct rental increase not justified by
changes in market conditions. Second, by imposing rents on co-users, the government would
fundamentally change the pricing options in this industry. In effect, each co-user would face
additional costs in utilising a tower on crown land. This could cause them (a) to reduce their
usage of such towers and (b) to substitute their usage to towers not on Crown land. In either
case, this would violate the objectives of maximising site use and minimising site proliferation.

Adjustments to rents based on strategic importance – that is, the benefits to users from a
particular site – are, in fact, a tax on the industry. Imposition of taxes are usually justified on
economic efficiency grounds – correcting a market failure – or distribution grounds – as a non-
distortionary means of raising general government revenue. Neither of these grounds holds in
this case:

• Efficiency: there are no obvious market failures that require a reduction in the usage of
telecommunications towers – either generally or by specific users – that would justify a
tax that may do just that. Moreover, to the extent that there are environmental
concerns, these have nothing to do with the user benefit from a site but from the costs
of utilising a site.

• Distribution: the investment and utilisation of crown lands for telecommunications sites
is unlikely to be inelastic in the long-run. As such, the government runs the risk of
significant distortions to economic and commercial behaviour from raising revenue in
this manner.

Absent these usual justifications, claims to raise rents on the basis of ‘strategic importance’
appear to amount to ‘hold-up’ by the government. In the classic ‘hold-up’ problem, having
invested in sunk assets and, therefore, finding it very costly to switch sites, the land owner has
moved to appropriate some of the value from the broadcast industry. In the extreme, user-
based charging of rents amounts to the government taking a long-term equity position in that
industry without the contribution of productive services. This is exacerbated by the notion that
co-user pricing will be, in some sense, managed by the NSW government. This will likely
discourage any investment in improvements in Crown land in NSW; regardless of intended use
– towers or otherwise. If the government wishes to raise taxes on the citizens of NSW, there
are probably more efficient and less distortionary means of doing so.

Finally, given the intention to convert the management of Crown land assets into a Public
Trading Enterprise, these proposals appear to violate competitive neutrality. Put simply, very
little Crown land is rented on a basis other than alternative use cost and, moreover, two towers
operating adjacent to one another on Crown land could face very different rents.

The basis for charging rents on Crown land should be based solely on its unimproved value in
its next best alternative use. This is likely to be similar to commercial rents on adjacent
properties (or an independent land valuation) plus an additional amount if there are
environmental issues.
Contents Page

1 Background ................................................. 2

2 Co-User Charges .......................................... 3

2.1 The Current Arrangement ............................. 3

2.2 Co-User Based Charging ............................... 4

2.3 Summary ................................................... 6

3 ‘Strategic’ Importance................................. 7
3.1 Price Bounds in a Regulatory Setting .............. 7

3.2 Disadvantages of the Upper Bound ................. 9

3.3 Issues in Calculating Opportunity Cost .......... 15

4 Conclusion ................................................. 17

May 2005 i
Section 1 Background

1 Background

IPART is currently undertaking a Review of Rental for Crown Land

Communication Tower Sites in NSW. The goal of the review is to provide
a framework to allow the NSW Government to earn a “fair market-
based commercial return” with the related objectives of (i)
maximising use of the sites; (ii) minimising proliferation of the sites;
and (iii) not adversely impacting on investment in the relevant
industries.

Broadcast Australia Ltd – a renter of broadcasting tower sites and an

owner and provider of infrastructure on them – has asked me to
provide an analysis of two key issues that have arisen in the context
of this review.

• Co-User Charges: is it economically appropriate for charges or

rents to be paid by each co-user of the site as well as the
primary user?

• ‘Strategic’ Importance: is it economically appropriate for rents to

be based on the ‘strategic’ importance of sites?

Sections 2 and 3 of this report will outline my analysis of each of

these issues. It is found that co-user charges will potentially create
significant pricing distortions and a loss of user value, without
increasing total rents earned relative to more efficient rental charging.
In addition, there appears to be no justification for rental premiums
based on ‘strategic’ importance that will either enhance the efficient
use of Crown Land or provide a non-distortionary means of raising
overall government revenue in NSW. A final section concludes.

2
Section 2 Co-User Charges

2 Co-User Charges

Primary users are parties who contract with the land management
agency for access to land to develop it for use in communications and
broadcasting. These are also the parties making significant
infrastructure investments in a site. Primary users then contract with
co-users for various services on the site including installation of
equipment, maintenance and use of infrastructure.

IPART have argued that if there is to be a “fair sharing of the

benefits of site use” then this “implies that the land management
agencies are entitled to a share of the fees primary users collect from
co-users, after allowing for the cost of developing and maintaining
infrastructure used by co-users.”

Below I will challenge the implication of this notion of ‘fair sharing’

on the grounds that it likely leads to adverse impacts on economic
efficiency here. For the moment, to examine what ‘fair sharing’
means, let α (< 1) be the share of the benefits that accrues to the
NSW Government. Let K be the cost of infrastructure on a site and
M the on-going costs of maintenance. Let L be the value of the land
in its next best alternative use.1 Finally, suppose that a site has n users,
indexed by i, who have a value of vi. Let V = ∑ i vi be the aggregate
potential user-value from a site. Then, the total (potential) net
benefits from the site are:

V–K–M–L

And the ‘fair sharing’ rule implies that the NSW Government would
receive α(V – K – M) + L.

2.1 The Current Arrangement

At present, primary users pay a rent, r, to the land management

authority and charge co-users prices, pi. For a given user, the price, pi,

1 Suppose all of these values are amortised, annual costs and benefits.

3
Section 2 Co-User Charges

must be sufficiently low as to make it worthwhile for them to use the

site. That is,

pi ≤ vi for each i.

This also implies that ∑ i

pi ≤ V . It also must be the case that, in
aggregate, total payments must cover site on-going costs. That is,

∑ i
pi ≥ M + r

Notice that payments may not cover past development costs as the
primary user may have made a ‘mistake’ and over-invested in the site.
On the whole, however, it is likely that payments cover development
costs as well.

What is important about the current system is that the primary user
has an incentive to encourage use by co-users so long as those users
have any positive net value from using a site.

2.2 Co-User Based Charging

Now suppose that the NSW Government imposes a charge, ri, on

each co-user. These charges may be the same for all or differential. In
addition, these charges may be imposed directly on co-users or
indirectly through primary users.

2.2.1 Direct Charging

If they are charged directly, then a co-user, i, will only use a site if
pi + ri ≤ vi . This will likely mean that the price charged by the
primary user to the co-user would have to change. However, if
ri ≥ vi , then the co-user will definitely be forced to stop using the site.
Moreover, this could also occur should the primary user choose to
maintain their current payments to some co-users.

This situation – of co-users being charged too much to make use

worthwhile – is more likely to arise if co-user charges are the same for
each co-user. Differential charges may overcome this issue but it will
require the Government to step in the shoes of the primary user and
negotiate individual co-user fees. This will be an administratively
demanding and an informationally intensive activity. It may also
require arbitration processes. Finally, even with negotiated rents, the

4
Section 2 Co-User Charges

Government does not control the price charged for access by the
primary user and so distortions may continue to arise.

2.2.2 Indirect Charging

Alternatively, the Government could levy ri on primary users. In this

case, co-users will continue to use the site if pi ≤ vi but now the price
charged to them will reflect the user-specific cost, ri, as imposed by
the Government. If pi was the previous price paid by a co-user, then it
could easily be the case that pi + ri ≥ vi or worse that ri ≥ vi in which
case the primary user will set a new price that makes it prohibitively
expensive for the co-user to continue using the site. This is because
now the primary user faces more ‘user-specific’ costs and so may
choose to economise on these by not servicing low value users.

To guard against this possibility would require the Government to

negotiate user-specific charges with each primary user; again an
administratively demanding and information intensive activity likely
requiring arbitration.

2.2.3 Annual Rental

A final proposal is to not have co-user charges explicitly but to build

them into annual rental rates to site owners. This has the potential of
avoiding the distortionary issues that come from direct and indirect
co-user charging but only if annual rental rents are ultimately
independent of the number and type of co-users on a site.

Suppose then that a rental level, r, is set based on the historic co-
usage of a site. What happens next year? Market conditions change.
New uses for communications towers arise. Some users’ values
increase while other’s falls. In some cases, some co-users may no
longer wish to use a tower.

A simple approach would be to base next year’s rental charge on the

number and type of co-users then. However, the primary user will
recognise this and when considering its charges to co-users will adjust
them for the additional costs that might arise as the annual rental
adjusts. In the end, this is a less transparent but just as distortionary
process as explicit co-user charging. Moreover, the recalculation of
annual rentals will likely cause all of the information and
administrative costs associated with direct charging.

A much better approach would be to enter into long-term rental

agreements with site owners. However, because of changing

5
Section 2 Co-User Charges

technologies and market circumstances, the Government will need to

take considerable care in looking at current co-users as a measure of
future co-user benefits. Thus, this too would be an administratively
difficult undertaking with all administrative costs being frontloaded in
the present.

2.3 Summary

Any form of co-user charging will likely involve the following costs:

• Administration: to collect information and negotiate the

appropriate co-user charges or costs would require a very
extensive and on-going review by the NSW Government.

• Allocative inefficiency: in any case, it is likely to be the case that

the resulting pricing is inefficient as it involves making user-
specific a cost that is site-specific. User-specific costs will be
built – one way or another – into the price co-users pay and
will likely lead to some co-user discontinuing their use of the
site. This will be a direct reduction in allocative efficiency and
will not maximise use of the sites.

In effect, a move to co-user based rentals involves the Government

getting involved and micromanaging the primary user’s
communication tower businesses. Moreover, it will do this without
any efficiency rationale and with the likely creation of dead-weight
losses from any monopoly power the Government may have as a land
owner of some specific sites.

In the end, to avoid such costs, infrastructure providers will look at

other land sites that are not government-owned. Commercial land-
owners do not micromanage businesses that pay them rent and the
avoidance of the administrative and efficiency costs of co-user based
rents will likely be attractive over the long-term.

If the intention is for the Government to increase rental revenues for

itself, then this will be more efficiently achieved by doing so than by
engaging in co-user charging. The increase in rents may lead to some
substitution from Crown Land sites – although this would harm
government revenues as well as site use. However, it will avoid the
micromanagement and potential usage distortions for businesses that
utilise Crown Land.

6
Section 3 ‘Strategic’ Importance

3 ‘Strategic’ Importance

IPART have considered that an ‘efficient price’ is one that lies

between the following lower- and upper-bounds:

• Lower-bound: the value the land management agency could earn

for the site in its next best alternative use. This is sometimes
referred to the opportunity cost of the site’s use.

• Upper-bound: the amount a user or users of a site would be

willing-to-pay without switching to their next best alternative.

These two bounds set the range of a price in any commercial

negotiation as they determine what share of the commercial profits
arising from a site each party will receive. However, it is important to
recognise that they are rarely the bounds for efficient pricing in a
regulatory setting.

3.1 Price Bounds in a Regulatory Setting

Regulators and governments are, usually, concerned with goals other

than pure profit. They are usually concerned with efficiency of both
the use and development of an asset; such as land.

Utility regulators – such as IPART – have, in the past, recognised that

an asset will have maximal use if both consumers and developers
have appropriate incentives to make key investments. For instance, to
maximise use of a gas distribution network, consumers need to make
investments in gas appliances while developers have to make
investments in the infrastructure themselves. To ensure these are
efficient, it is best that regulated prices are based on costs. For
developers, this means that they should not be able to earn excessive
returns on their capital investment costs but that they should be able
to recover a commercial return on those costs. For consumers, on-
going charges should only exceed user-specific costs if there is a need
to provide for the recovery of investment costs.

What this means is that with regard to assets such as land, to ensure
efficient development and use, regulators have favoured valuing land
at current market values or alternatively at some measure of historic

7
Section 3 ‘Strategic’ Importance

cost.2 IPART too accepted this principle when determining the rents
on waterfront tenancies for private use. In that case, IPART used the
market value of adjacent land.3 By setting land values in this way, the
appropriate pricing signals are sent to both users and developers so
that each internalises costs they generate but otherwise make their
decisions on individual grounds. Such pricing generates both
allocative and dynamic efficiency leading to greater overall economic
welfare.

Specifically, from an economic perspective, a site is appropriately

used for communications towers if and only if:

V–M–L–K>0

Recall that L is the amortised value of the land in its next best
alternative use. However, at best, primary users and co-users
decisions to use a site for communications will be based on whether
V – M – r – K is positive or not. Notice that if r < L, then some site
development for communications towers will go ahead even if V – M
– L – K < 0; leading to inefficient over-investment. On the other
hand, if r > L, then some site development will not occur even where
V – M – L – K > 0. It is only where r = L, that private decisions to
utilise a site for communications towers will be aligned with the
socially efficient outcome.

In this respect, for regulatory pricing, a cost-based approach is

favoured.4 What this means for the present matter is the following:

• In a regulatory setting, the appropriate rental for land should

be based on the opportunity costs of the land itself. This is in
the absence of any key investments in the land on the part of
the NSW Government.

2 See the ACCC decisions with regard to airports – most notably Sydney airport.
3 IPART, Review into Rentals for Waterfront Tenancies on Crown Land in NSW, April

2004.
4 In some circumstances, it is recognised that to ensure that investment costs are
recovered in a less distortionary manner some form of differential user-charges are
required (e.g., by utilising Ramsey pricing). The idea of Ramsey pricing is to charge
users with inelastic demand more than those with elastic demand. This will
minimise the reduction in total use higher prices might otherwise generate.
Nonetheless, it is safe to say that, while the potential benefits of Ramsey pricing is
acknowledged, regulators around Australia have not employed it because the
demand-side informational issues have been too substantive.

8
Section 3 ‘Strategic’ Importance

• Consequently, the only variation in rentals from site to site

across NSW should be based on differences in opportunity
cost and not differences in how the land is used.

• Premiums placed on rents related to actual use are likely to

lead to distortions in investment incentives on the part of
both infrastructure providers and users.

Simply put, if IPART intends to be consistent with regulatory pricing

principles, then the appropriate basis for rent determinations is the
opportunity cost of the land (i.e., IPART’s lower bound).

3.2 Disadvantages of the Upper Bound

IPART considers that the upper bound on rents for Crown Land
should be the “value of the site to the user.” In this case, the upper
bound on rents would be ru = V – M – K. Notice that, as V includes
the value of the site to all users, this upper bound is potentially very high.
For some sites, the entire value of broadcasting to a district rests on
that site. In its absence, all commercial revenue (say from advertising)
as well as consumer surplus from television and radio broadcasting
would be lost. Hence, these would be part of users’ willingness to pay.

In other cases, the upper bound may be lower. This would be the
case if users could easily develop adjacent sites and would switch to
those sites should rents rise by too much.

IPART acknowledges that truly setting land rents at the upper bound
extreme would not amount to a fair use of the benefits. Nonetheless,
what IPART does propose to do is to measure, in some way, V – M
– K and permit the NSW Government to earn some share, α, of that
value. Thus, α(V – M – K) represents a premium above the cost-
based rent discussed in Section 3.1. IPART’s key issue appears to be
what the size of this premium will be and the weight placed on V –
M – K.

3.2.1 Measurement Issues

Having any premium will involve an additional measurement issue for

the Government: how to measure, V, M and K. It is useful to point
out the various decisions that would have to be made in this regard:

9
Section 3 ‘Strategic’ Importance

• How should K be valued? Capital valuation is one of the more

contentious issues in regulatory pricing. The life of the asset
has to be considered, economic risk has to be taken into
account (especially with uncertain demand and technological
developments), appropriate discounting needs to be applied,
and a decision needs to be made whether the asset valuation
is forward looking or based on historic costs.

• How should M be valued? The on-going costs of a site

involve management by the primary users. If that user acts to
reduce those costs, this will decrease M. However, if the
government appropriates a share of the benefits in rents, this
means that the reduction in M will be shared by the user and
the government. This will diminish the user’s incentives to
maintain those costs. Instead, the user only shares in a
fraction of any cost increase and so it may be that these
incentives translate into lower rents over time for the
government as M increases.

• How should V be valued? As noted earlier, there are many

difficulties associated with calculating user benefits. Here V is
not simply the revenue earned by the tower owner but also
the value to co-users. This depends upon the value received
by co-user customers as well as the costs of co-users. To
measure V accurately would require an audit of those
businesses. Note that if this is not done, there is a chance, V
may be valued too high and a tower may be forced to shut
down.

This does not mean that it is impossible to measure the upper bound
for the process of determining rents but that IPART will need to
consider the alternative methods by which this upper bound might be
calculated and weigh amongst them.

3.2.2 Potential for Distortions

By placing weight on the upper bound in rent determination, we will

effectively have a situation where r > L. As noted earlier, this means
that some efficient usage of sites for communications towers will not
occur.

Distortions can arise in several ways:

• If r is based at all on user values or on-going costs, then

primary users will factor in how changes in their business
strategy and pricing will impact upon r. As noted earlier, this

10
Section 3 ‘Strategic’ Importance

may give rise to a situation where the primary user does not
find it worthwhile to serve some co-users.

• For new investment, developers may avoid using Crown Land

sites and move to commercial or other ones where rents are
lower. This is potentially inefficient if the net value of Crown
Land sites was higher or the environmental costs lower.

• For existing investment, developers may opt to develop

additional sites for users too costly under usage-based rents
on Crown Land. This may lead to site proliferation.

• For existing investment, developers may have no choice but

to accept higher rents as investment costs have been sunk. (I
comment on this issue below). In this case, there will be no
distortion to existing use but the distortion may come from
signals sent to potential developers and investors in
infrastructure in NSW.

Put simply, the rent premium is like an additional tax on the use of
communications towers in NSW. In economics, taxes are usually
justified for two reasons:

• Efficiency: to mitigate externalities and discourage socially

costly activities.

• Distribution: to provide a less distortionary way of raising

government revenue.

In this matter, neither of these usual taxation rationales appears to

apply. First, the express wish of the government is to maximise usage
of sites and stop their proliferation. In this respect, imposing a tax
will not achieve this outcome and will likely reduce usage and increase
proliferation.

Second, in all of the submissions, I have not seen any case made that
a tax on communications towers will be non-distortionary. Non-
distortionary taxes are usually applied to goods with relatively inelastic
demand such as petrol and alcohol. They are rarely applied on
inputs to an industry as would be the case here. As I have noted
earlier, and is noted in some submissions, changes in usage and
investment may well arise as a result of significant increases in rents.

I do not have the information at my disposal to provide a full analysis

of the taxation-like impacts of putting a premium on rents for Crown
Land for this specific use. However, what is true is that any complete
analysis of such a premium would have to include a careful

11
Section 3 ‘Strategic’ Importance

assessment of its rationale – on either or both efficiency and

distribution grounds.

3.2.3 Creates Potential for Hold-Up

As noted above, for some sites, even if V – M – r – K < 0, it may be

the case that V – M – r > 0. In this situation, r may include a
premium but not deter usage continuing of the existing infrastructure.
However, what it would mean is that the infrastructure owner would
not end up earning a market-based return on past investment. Put
simply, those investment costs are sunk so even if the government
rents were to be excessive (from a perspective taken prior to
investment) they would not preclude on-going use now.

This might suggest that a tax like premium on land rents would not
be distortionary. However, it would amount to what economists call,
hold-up. Hold-up occurs when future prices do not reflect past
investment costs. In commercial matters, this can arise when firms
invest without long-term contracts being in place. In later
negotiations, sunk costs are not taken into account and those
investors are vulnerable to a squeeze from their customers. At the
extreme, when investors realise this possibility, they may choose not
to invest.

If rental charges do not take into account the sunk costs of

developers then the potential for hold-up arises. This may easily occur
if – as in one option – rents are determined by negotiation with the
land management authority. Because past investments are sunk, that
authority would have considerable bargaining power with respect to
site owners. As such, the rent premium may be high.

For those investors, they may not realise the long-term returns from
their investments. As noted above, this does not mean they will shut
down but it does mean that other investors will look carefully when
dealing with the government and, in particular, the land management
authority. They will take into account potential vulnerability to hold-
up and will change their invest plans accordingly.

The end result may be considerable under-investment in

infrastructure or an avoidance of investments that require

12
Section 3 ‘Strategic’ Importance

government dealings.5 This will erode government revenues as well as

resulting in economic inefficiencies in NSW.

It is for this reason that many regulators consciously take into

account sunk investment expenditures in regulatory pricing. While to
ignore them may bring short-run benefits to consumers, in the long-
run, the investment chilling effect of such decisions maybe more
worrisome.6 Similarly, excessive rent premia on land here may lead to
adverse long-run consequences.

3.2.4 Effective Government Equity

Some of the options as to how a premium might be recovered

amount to the NSW Government taking an equity position in
infrastructure providers. For instance, the ‘revenue sharing’ proposal
would either have the Government earning a proportion of revenues
or alternatively a direct appropriation of part of (V – M – K). IPART
recognise, of course, that this would involve intensive information
requirements of the type noted above.

In addition, however, an equity position by the Government will

dilute incentives for all users of communications towers and also
infrastructure providers to manage their businesses for the maximum
surplus. In effect, a revenue sharing scheme is like an additional
corporate profits tax on these firms. The effect of this will be a
reduction in their incentives to keep costs down and also a potential
investment chilling effect.

If the Government wishes to pursue these options then full public

ownership of the infrastructure and its management would be a more
transparent policy. Alternatively, the Government might purchase
shares of these firms if it is of the opinion that these represent good
investments for the State. Either way would more explicitly indicate
the policy direction embedded in a revenue sharing option.

5For a review of government hold-up in regulatory matters see Gregory Sidak and
Daniel Spulber, Deregulatory Takings and the Regulatory Contract, Cambridge University
Press, 1997.
6 For a discussion see Joshua Gans and Stephen King, “Access Holidays: The
Panacea for Network Infrastructure Investment,” Agenda, Vol.10, No.2, 2003,
pp.163-178.

13
Section 3 ‘Strategic’ Importance

3.2.5 Potential for Abuse

Permitting a premium on rents based on the value of a site to a renter

would also leave open the potential for abuse by government
authorities to manipulate that value. For instance, special zoning laws
might be used to restrict the land that could be used for
telecommunications towers to Crown land. This would, in turn,
reduce the options available to tower developers and hence, the
‘strategic value’ placed on using Crown land.

A government might, therefore, consider this as a reason, or part of a

reason, to enact special laws that may impact on value and, in turn,
rents. In contrast, if rents are based purely on opportunity cost,
zoning regulations would not have a direct impact on rents and the
potential for abuse would not be an issue.

3.2.6 Violates Competitive Neutrality

The final issue with a premium over opportunity cost for rent is that
it may potentially violate competitive neutrality. A set of charges is
competitively neutral if competitors face the same marginal costs after
the charges are imposed.7 Here, however, the rent premium is
proposed to vary from site to site depending upon its usage and
strategic value. This means that it is conceivable that two competing
towers could face very different charges. This would violate
competitive neutrality.

In addition, for some sites, primary users and co-users are exactly the
same. If charging is based on the value to each, then it is conceivable
that there could be an advantage or disadvantage to users that are
vertically integrated; that is, ones that own infrastructure. The
problem is that the uncertainty with which a premium might be
imposed may generate either outcome. Moreover, as the Government
has some market power with respect to some sites – perhaps due to
their unique position – this would give rise to further variance in rents
not related to the underlying opportunity costs.

7 For a discussion of competitive neutrality see Joshua Gans and Stephen King,

“Competitive Neutrality in Access Pricing,” Australian Economic Review, 2005

(forthcoming) or "When are Regulated Access Prices Competitively Neutral? The
Case of Telecommunications in Australia,” Australian Business Law Review, Vol.32,
No.6, 2004, pp.407-414.

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Section 3 ‘Strategic’ Importance

3.3 Issues in Calculating Opportunity Cost

In order to send appropriate signals for future investment and to

provide for the maximal usage of sites, rentals for Crown Land
should be based solely on the opportunity cost of the land. Not only
will this be economically efficient but it will also result a less
administrative and informational burdens and potentially minimise
on-going conflicts requiring arbitration. It is for this reason that most
regulators opt for a cost-based approach to pricing. The issues in
setting prices here are akin to regulatory pricing situations or tax
policy and hence, consistency and economic efficiency favour a cost-
based approach.

I note that IPART appeared concerned about adopting their solution

for waterfront rentals in this particular case. This appeared to be the
case because for some sites there was no market value for land – as
adjacent properties were not traded. However, this (1) does not
prevent such market values being used when they are available and (2)
does not prevent an independent valuation of land assets for the
purpose of arriving at an appropriate rent in this case. As a
consequence, this lack of information does not appear to be a strong
reason why a cost-based approach should not be used.

It should also be noted that a rent based purely on the value of the
land in its alternative use would not generate the lowest possible
outcome in terms of rents to the NSW Government. In its
deliberations on the valuation of land for Sydney Airport, the ACCC
commissioned Professor Rohan Pitchford for an assessment of the
appropriate land value (i.e., rental income) in that case.8 In that case,
he dismissed a pure market valuation of land and argued that, because
Sydney airport was essential, the land value would have to subtract
the cost of rebuilding that airport elsewhere (as this is what using the
land for some other purpose would require). Thus, he would have
rents based on an asset value of L – K rather than just L.

It appears to me that rents based on L – K (while avoiding potential

hold-up problems) may not lead to an efficient outcome for Crown
Land for communications towers. This is because an efficient rent
would reflect the lost opportunity of building a tower on that land as
opposed to elsewhere at the time of building. At that decision point,
what was being lost when the tower was built on Crown Land is what

8See Rohan Pitchford, “Sydney Airport Land Valuation: An Assessment,”

www.accc.gov.au.

15
Section 3 ‘Strategic’ Importance

that land might have been used for. Today, should the tower be
moved, what would be lost would be potentially much more given the
regional development that has occurred in the intervening time
period. As such, a pure land valuation approach would capture the
notion of opportunity cost that is relevant for this matter.

Finally, what potentially differs here as opposed to the waterfront

case is the potential environmental effects of towers in some
locations (e.g., national parks). In those instances, a surcharge to rents
based purely on land valuation might be appropriate. This is because
the environmental cost was part of the opportunity cost of using the
land for that purpose. I note, however, that care in evaluating this
would be required as the alternative tower location (not on Crown
Land) may give rise to a similar cost. In this case, a surcharge may not
give the correct pricing signals to investors.

16
Section 4 Conclusion

4 Conclusion

In its deliberations on the rent for Crown Land for communications

towers, the IPART issues and background papers9 have considered
two clear deviations from efficient regulatory pricing principles.

First, IPART is considering co-user based charges when the cost of

the underlying service – that is, access to land – is unrelated to the
level of the usage of that land. By effectively converting fixed fees
into marginal usage ones, IPART would create a distortion that would
likely result in a reduction in usage of sites and potentially in an
increase in site proliferation. Moreover, administratively, to avoid
significant distortions would require the Government to take an
active and on-going role in micromanaging communication towers
businesses. This is likely to cause many additional costs.

Second, IPART is considering allowing the NSW Government to

recover a premium in its rents over the level that would be given by
the land’s value in its next best alternative use. To do so would appear
to be allowing a hold-up problem to emerge with respect to
investment taking place on Crown Land. Such a premium is akin to a
tax on the industry with consequent potential distortions in efficiency,
site use and infrastructure development. Moreover, the methods of
determining the rent premium involve in-depth examination of the
operation of the businesses – both primary and co-user – as well as
the potential for Government taking an effective equity position in
those businesses. It is a clear departure from the cost-based
approaches to pricing regulation that regulators throughout the world
engage in. This departure does not appear to be based on economic
efficiency – internalising externalities – nor on an identification of a
potential non-distortionary taxation source.

It is my belief that a rent based on the valuation of the land in its next
best alternative use plus additional surcharges for potential
environmental costs (where appropriate, e.g., in national parks) would
be a better approach. This would involve pure rent for unimproved
land use by primary users (i.e., no co-user charges) as well as a
mechanism for rental price review over time based on changes in land
valuation. The end result would likely be a more efficient, transparent

9 Dated 27th September, 2004 and 23rd February, 2005, respectively.

17
Section 4 Conclusion

and administratively easy way to manage the relationship between

Crown Land users and the NSW Government.

18
Managing Director

Joshua Samuel Gans

Addresses Numbers
Melbourne Business School, Phone: (03) 9349 8173
200 Leicester Street Fax: (03) 9349 8169
Carlton VIC 3053 Mobile: (0414) 911 161
E-Mail: Joshua.Gans@core-research.com.au

Citizenship: Australian Birthdate: 25th May, 1968

Education

Stanford University, U.S.A., Doctor of Philosophy (in Economics), 1990 - 1994, Dissertation Title:
Essays on Economic Growth and Change, Advisors: Professors Paul Milgrom, Kenneth J.
Arrow and Avner Greif.
University of Queensland, Australia, B.Econ (First Class Honours) with majors in Economics and
Law, 1986 - 1989.

Positions Held

Professor of Management (Information Economics), Melbourne Business School University of Melbourne

(October 2000 to present).
Director, Melbourne Business School Ltd.
Associate Director, Intellectual Property Research Institute of Australia, (March, 2002 to present)
Professorial Fellow, Department of Economics, University of Melbourne (2001 to present)
Associate Professor, Melbourne Business School, University of Melbourne (July, 1996 – October 2000).
Lecturer, School of Economics, University of New South Wales (September, 1994 - July, 1996).

Honors and Awards

Best Discussant, Annual PhD Conference in Economics and Business, 2002.

Fellowship, Jerusalem Summer School in Economic Theory, 1993
Stanford Center for Conflict and Negotiation Fellowship, 1993
Fulbright Postgraduate Scholarship, 1990
Stanford University Graduate Fellowship, 1990
University Medal, University of Queensland, Australia, 1989
Reserve Bank of Australia Cadet Scholarship, Australia, 1988

Teaching Experience
Postgraduate subjects in microeconomics, incentives and contracts, economics of innovation,
macroeconomics, advanced game theory, personnel economics (Melbourne Business School
and University of New South Wales, AGSM and School of Economics)
Undergraduate subjects in microeconomics, macroeconomics, technological change and development
(University of New South Wales)
Executive Education in technology strategy (INSEAD) and regulatory economics
 Consulting

Long-term Associations

• Charles River Associates, Senior Consultant (August 2002 - )

• CoRE Research (June, 2001 - )
• Australian Competition and Consumer Commission (October, 1999 – June 2000)
• The Economist Advocate (February, 1999 – June 2002)
• London Economics, Australia (February 1997 - May, 1999)

Projects by Industry

1. Electricity

• Economic advice to the ACCC on the partial acquisition of Loy Yang Power by AGL (November –
December 2003).
• Expert testimony for TXU in appeal at the Victorian Supreme Court over the ORG’s electricity
pricing determination (March, 2001).
• Report critiquing the form of regulation of Victorian electricity distribution, on behalf of United
Energy (September - October, 2000).
• Participation in a training program for Macquarie Generation (December, 1999)
• Economic analysis of electricity generating asset in preparation for a bid (March, 1999)
• Analysis of a contract for sale of electricity to a smelter project (February, 1999)
• Report on NEMMCO pricing principles for the National Retailers Association (September, 1998)
• Analysis of gaming the National Electricity Market Rules (February, 1998)
• Analysis of proposal for allocation of power purchasing agreements in Queensland (December, 1997)
• Analysis of vesting contract arrangements for the Queensland Electricity Reform Unit (December,
1997)
• Analysis of proposals for electricity transmission pricing in Queensland (September, 1997)
• Report on options for electricity industry reform in Western Australia (September, 1997)
• The role of greenhouse gas regulation on electricity pool behaviour (July, 1997)
• Advisor to Queensland Electricity Reform Unit: review of generator market strategies in the NEM
and the implications of contracts (May 1997 - November, 1999).
• Bid for Loy Yang: report on the implications of market power for asset values (October-February
1997);
• ETSA Generation: report on the regulation of market power (August, 1996);
• NSW Electricity: report to ACCC on potential for anti-competitive behaviour (March - April, 1996);

2. Gas

• Submission on behalf of Envestra to the Queensland Competition Authority regarding its

determination on regulated prices for Queensland's gas distribution network (March - April, 2001).
• Analysis of the competitive implications of a gas contract for electricity generation (March, 1998).
• Advice on the use of electricity prices in gas supply contracts to generators (May, 1997).
• Evaluation of R.J. Rudden report on AGL’s cross subsidies (April, 1997)
• Gas transmission pricing: reviewed IPART gas transmission submission on behalf of BHP (October
1996-April 1997);
• Gas market: report on the market power implications of the proposed Victorian gas market and
examined alternative market arrangements (January-March 1997);
• ETSA Gas: reports on appropriate pricing of gas in electricity use (April, 1996);

3. Telecommunications

• Submission to the ACCC on behalf of Hutchison Telecommunications in respect of its mobile

services review (July 2003).

2
 • Submissions to the ACCC on behalf of AAPT in respect of Telstra’s proposed PSTN undertakings
(June 2003).
• Advice to Hutchison telecommunications on bundling in Pay TV markets (June 2002)
• Advice and analysis to AAPT with regard to its interconnection pricing dispute with Telstra at the
Australian Competition Tribunal (April, 2001 – May, 2002).
• Report submitted as part of SingTel submission to the ACCC evaluating the competitive implications
of Vodafone’s undertakings with respect to its proposed bid for C&W Optus (February, 2001).
• Assistance to C7 in determining appropriate access pricing for Foxtel/Telstra’s cable television
infrastructure (December, 2000 – January, 2001).
• Research report for ACCC on Mobile termination of fixed line calls (December, 1999)
• Research report for ACCC on PSTN termination by non-dominant networks (December, 1999)
• Expert witness for the Australian Communications Authority/ACCC in a matter against Cable and
Wireless Optus at the Administrative Appeals Tribunal on local number portability (August, 1999)
• Advice to ACCC on commercial churn matter against Telstra (March, 1999 – January, 2000)
• Analysis of criteria for declaration of intercity transmission lines in telecommunications (ACCC);
(March, 1998)
• Report on contracting arrangements in telecommunications (October, 1997)
• Report on local number portability and technology adoption for Telstra (November, 1996)

4. Banking and Financial Services

• Submission to the ACCC on behalf of First Data with regard to its acquisition of CashCard
(November 2003 – January 2004).
• Research report and assistance to the National Australia Bank in assessing the competitive
implications and regulatory options for the setting of interchange fees in credit card associations
(March, 2000 – March 2001).
• Examination of theoretical arguments regarding horizontal mergers in Australian banking industry
(March, 1997 and May, 1998)
• Analysis, on behalf of Lend Lease, of submission to the ACCC for a joint venture between Lend
Lease and National Mutual (November - December, 1997)
• Report on access to the electronic payments system for the National Australia Bank (March - July,
1998).

5. Pharmaceuticals

• Advise to Mayne Healthcare on wholesale reform under the Pharmaceutical Benefits Scheme
(February 2002).
• Advice to the National Pharmaceutical Services Association on the changes to the wholesale margin
in the Pharmaceutical Benefits Scheme (May 2001 - June 2001).
• Advice to Faulding Healthcare on implications of COAG review of the pharmaceutical industry
(April, 1999 – June, 1999)
• Economic analysis, on behalf of Faulding, of the competition issues surrounding a proposed takeover
of AMCAL by Faulding Retail (September, 1998).
• Report on merger authorisation for Sigma and QDL(Nov, 1996)

6. Other

• Economic advice to Pacific Brands on the proposed acquisition of Joyce by Dunlop Foams
(September 2004 – January 2005).
• Economic analysis of smash repairs and insurance for Consumer Affairs Victoria (September, 2004).
• Analysis of exclusive dealing claim by Peter Stevens Motorcycles against Kawasaki on behalf of
Kawasaki (July – October 2004).
• Report for the MTAA on shopper docket schemes in petrol retailing (August 2004).
• Economic advice to Boral on its proposed acquisition of Adelaide Brighton and litigation against the
ACCC (May 2004 – October 2004).
• Work for AWBI on the value of the single desk and its performance in wheat marketing (September
2003 – September 2004).

3
 • Report for Medibank Private on the economic case for a private health insurance rebate (October
2002 – February, 2003).
• Submission to Productivity Commission on behalf of Adsteam Marine Ltd on harbour towage
regulation (May – June 2002).
• Submission to ACCC on behalf of Adsteam Marine Ltd on capital cost calculations in harbour towage
pricing (April 2002).
• Evaluation of the single desk selling of dairy products on behalf of the Australian Dairy Corporation
(September 2001).
• Advice to the ACCC on competition issues associated with B2B E-Commerce (August - September,
2001).
• Submission to the Victorian Treasury on the role of economic regulation and supply security in the
proposed Essential Services Commission, on behalf of the Regulated Businesses Forum (October,
2000).
• Submission to the Competition Review of the Wheat Marketing Act on behalf of AWB Limited
(March - August, 2000).
• Analysis of the Victorian Freight Rail access pricing regime for Freight Australia (July, 2000).
• Paper for Inquiry into Intellectual Property on behalf of APRA (November, 1999).
• Competitive Analysis of the proposed acquisition of Hymix by Pioneer (December, 1998)
• Analysis of access pricing principles for interstate rail (ACCC); (December, 1997)
• Assistance to Fairfax on submission to Productivity Commission on broadcast regulation (April,
1999);
• Report on supply security in electricity, gas and water (December, 1998)
• Analysis of merger between two oil refineries (August, 1998)
• Report on the Efficient Allocation of Digital Spectrum for John Fairfax Holdings Ltd (February,
1998)
• Report on product standards for electrical appliances in Victoria (March, 1997)
• Report on social implications of a merger for the provision of radiology services in Queensland (Jan
1997)
• Report on infrastructure access dispute in aluminium mining (November, 1996).
• Freight Rail Corp (NSW): Access dispute resolution with IPART (October 1996).
• Rationale for group negotiations for regional medical practitioners (September, 1996).
• Air NZ: theoretical work on the efficiency of access pricing by airports (March - April, 1996);
• Local Government Reform in Tasmania: developing a conceptual framework for the re-organisation
of governmental responsibilities among local and state governments (February - May, 1996).
• New South Wales Taxation Authority: Demand conditions in swimming pool construction
(December, 1994).

Litigation and Witness Statement Preparation

• Expert Witness Testimony on behalf of ARA on hazardous waste trade (December 2002 – February
2003).
• Expert testimony for TXU in appeal at the Victorian Supreme Court over the ORG’s electricity
pricing determination (March, 2001).
• Expert witness at Appeal Tribunal for United Energy appealing the Office of the Regulator General’s
Determination on prices for electricity distribution in Victoria (October, 2000)
• Expert witness at the Administrative Appeals Tribunal for the Australian Communications Authority
on dispute with Cable and Wireless Optus over local number portability requirements (August, 1999)
• Advice to ACCC on trade practices matter against Safeway (July, 1998 – August,, 1999)
• Advice to ACCC on predatory pricing case against Boral (April, 1998 – February, 2000)
• Assistance to Professor Philip Williams in preparation of expert witness statement for Australian
• Competition Tribunal consideration of the authorisation of the Australian Performing Rights
Association (January - August, 1998)
• Report on damages calculation for misleading information case in the building industry (August,
1997)
• Report on the economic theory of damages for price fixing violations (March, 1997)
• Submission of competitive implications of Pay TV mergers in New Zealand (Nov 1996)

4
 Publications

Books
Finishing the Job: Real World Policy Solutions in Housing, Health, Education and Transport, Melbourne
University Publishing: Melbourne, 2004 (forthcoming).
Publishing Economics: Analyses of the Academic Labour Market in Economics, Edward Elgar: Cheltnam,
2000.
Principles of Economics (with Stephen King, Robin Stonecash and N. Gregory Mankiw), 2nd Pacific Rim
Edition, 2003 (1st Australasian Edition, Harcourt, Sydney, 2000).
Principles of Macroeconomics (with Robin Stonecash, Stephen King and N. Gregory Mankiw), ), 2nd
Pacific Rim Edition, Thomson, Melbourne, 2003 (1st Edition, Harcourt-Brace, Sydney, 1999).
Principles of Microeconomics (with Stephen King and N. Gregory Mankiw), 2nd Pacific Rim Edition,
Thomson, Melbourne, 2003 (1st Edition, Harcourt-Brace, Sydney, 1999).

Journal Articles
International

“Patent Renewal Fees and Self-Funded Patent Offices,” (with Stephen King and Ryan Lampe),
Topics in Theoretical Economics, Vol.4, No.1, 2004, Article 6.
“Vertical Integration in the Presence of Upstream Competition,” RAND Journal of Economics, 2004
(forthcoming).
“Markets for Ownership,” RAND Journal of Economics, 2004 (forthcoming).
“Can Vertical Integration by a Monopsonist Harm Consumer Welfare?” (with Catherine de
Fontenay), International Journal of Industrial Organization, Vol. 22, No. 6, 2004, pp. 821-834.
“When Does Funding Research by Smaller Firms Bear Fruit? Evidence from the SBIR Program,”
(with Scott Stern), Economics of Innovation and New Technology, Vol.12, No.4, 2003, pp.361-384.
“A Technological and Organisational Explanation for the Size Distribution of Firms,” (with John
Quiggin) Small Business Economics, Vol.21, No.3, November 2003, pp. 243-256.
“Approaches to Regulating Interchange Fees in Payment Systems,” (with Stephen King) Review of
Network Economics, Vol.2, No.2, June 2003, pp.125-145.
“The Product Market and the Market for ‘Ideas’: Commercialization Strategies for Technology
Entrepreneurs,” (with Scott Stern), Research Policy, Vol.32, No.2, February, 2003, pp.333-350.
“Organizational Design and Technology Choice under Intrafirm Bargaining,” (with Catherine de
Fontenay), American Economic Review, Vol.93, No.1, March 2003, pp.448-455.
“The Neutrality of Interchange Fees in Payment Systems,” (with Stephen King), Topics in Economic
Analysis and Policy, Vol.3, No.1, 2003, Article 1.
“When Does Start-Up Innovation Spur the Gale of Creative Destruction?” (with David Hsu and
Scott Stern), RAND Journal of Economics, Vol.33, No.4, pp.571-586.
“Exclusionary Contracts and Competition for Large Buyers,” International Journal of Industrial
Organization, Vol.20, 2002, pp.1363-1381.
“Regulating Private Infrastructure Investment: Optimal Pricing for Access to Essential Facilities,”
Journal of Regulatory Economics, Vol.20, No.2, 2001, pp.167-189.
“Numbers to the People: Regulation, Ownership and Local Number Portability,” (with Stephen
King and Graeme Woodbridge), Information Economics and Policy, 13 (2), June 2001, pp.167-180.
“Using ‘Bill and Keep’ Interconnect Arrangements to Soften Network Competition,” (with
Stephen King) Economic Letters, 71 (3), June 2001, pp.413-420.
“Regulating Endogenous Customer Switching Costs,” (with Stephen King), Contributions to
Theoretical Economics, Vol 1, Issue 1, 2001, Article 1.
“Mobile Network Competition, Customer Ignorance and Fixed-to-Mobile Call Prices,” (with
Stephen King), Information Economics and Policy, Vol.12, No.4, 2000, pp.301-328.
“Incumbency and R&D Incentives: Licensing the Gale of Creative Destruction,” (with Scott
Stern), Journal of Economics and Management Strategy, Vol.9, No.4, 2000, pp.485-511.

6
 “Network Competition and Consumer Churn,” Information Economics and Policy, Vol.12, No.2, 2000,
pp.97-110.
“First Author Conditions,” (with Maxim Engers, Simon Grant and Stephen King), Journal of Political
Economy, Vol. 107, No.4, August 1999, pp.859-883.
“Limited Information, the Possibility of Rational Choice and the Contingent Valuation Method,”
International Journal of Social Economics, Vol.26, Nos.1/2/3, 1999, pp.402-414.
“Why Referees Don’t Get Paid (Enough),” (with Maxim Engers), American Economic Review, Vol.88,
No.5, December, 1998, pp.1341-1349.
“Industrialization with a Menu of Technologies: Appropriate Technologies and the “Big Push,”
Structural Change and Economic Dynamics, Vol.9, No.3, September 1998, pp.63-78.
“Time Lags and Indicative Planning in a Dynamic Model of Industrialisation,” Journal of the Japanese
and International Economies, Vol.12, 1998, pp.103-130.
“Fixed Cost Assumptions in Industrialization Theories,” Economic Letters, Vol.56, 1997, pp.111-119.
“Measuring Product Diversity,” (with Robert Hill), Economic Letters, Vol.55, No.1, 1997, pp.145-150.
“Urban Productivity and Factor Growth in the Late Nineteenth Century” (with Raphael Bostic and
Scott Stern), Journal of Urban Economics, Vol.41, No.1 January 1997, pp.38-55.
“On the Impossibility of Rational Choice Under Incomplete Information,” Journal of Economic Behavior
and Organization, Vol.29, No.2, March 1996, pp.287-309.
“Majority Voting With Single-Crossing Preferences,” (with Michael Smart) Journal of Public Economics,
58 (1), February 1996, pp.219-238.
“Best Replies and Adaptive Learning,” Mathematical Social Sciences, Vol.30, No.3, 1995, pp.221-234.
“Evolutionary Selection of Beliefs,” Economic Letters, Vol.49, No.1, July 1995, pp.13-17.
“How Are The Mighty Fallen: Rejected Classic Articles By Leading Economists,” (with George
Shepherd), Journal of Economic Perspectives, Vol.8, No.1, Winter 1994, pp.165-179.
“Time and Economics: Reflections on Hawking,” Methodus, Vol.2, No.2, December 1990, pp. 80-81.
“Knowledge of Growth and the Growth of Knowledge,” Information Economics and Policy, Vol.4, No.3,
1989-90, pp.201-224.

Local

“Taking into Account Extraordinary Circumstances in Regulatory Pricing,” (with Stephen King),
Agenda, 2004 (forthcoming).
“Potential Anticompetitive Effects of Bundling,” (with Stephen King) Australian Business Law Review,
2004 (forthcoming).
“Supermarkets and Shopper Dockets: The Australian Experience,” (with Stephen King) Australian
Economic Review, 2004 (forthcoming).
“Does Australia’s Health Insurance System Really Provide Insurance?” Policy, 2004 (forthcoming).
“When are Regulated Access Prices Competitively Neutral? The Case of Telecommunications in
Australia,” (with Stephen King), Australian Business Law Review, 2004 (forthcoming).
“The Decision of the High Court in Rural Press: How the literature on credible threats may have
materially facilitated a better decision,” (with Rajat Sood and Philip Williams) Australian Business
Law Review (forthcoming, 2004).
“The Housing Lifeline: A Policy for Short-Run Housing Affordability,” (with Stephen King)
Agenda, Vol.11, No.2, 2004 (forthcoming).
“Structural and Behavioural Market Power under the Trade Practices Act: An Application to
Predatory Pricing,” (with Anthony Niblett and Stephen King) Australian Business Law Review,
Vol.32, No.2 April, 2004, pp.83-110.
“The Value of IP Protection in Markets for Ideas,” Australian Intellectual Property Law Bulletin, Vol.16,
No.6, 2003, pp.88-90.
“Contestability, Complementary Inputs and Contracting: The Case of Harbour Towage,” (with
Stephen King), Australian Economic Review, Vol.36, No.4, December 2003, pp.415-427.
“Access Holidays and the Timing of Infrastructure Investment,” Economic Record, Vol.80, No.248,
March 2004, pp.89-100.
“Anti-Insurance: Analysing the Health Insurance System in Australia,” (with Stephen King),
Economic Record, Vol.79, No.248, December 2003, pp.473-486.

7
 “Access Holidays for Network Investment,” (with Stephen King), Agenda, Vol.10, No.2, 2003,
pp.163-178.
“A Theoretical Analysis of Credit Card Reform in Australia” (with Stephen King), Economic Record
Vol.79, No.247, December 2003, pp.462-472.
“Regulating Termination Charges for Telecommunications Networks,” (with Stephen King),
Australian Journal of Management, Vol.27, No.1, June 2002, pp.75-86.
“The Economic Consequences of DVD Regional Restrictions,” (with Emily Dunt and Stephen
King), Economic Papers, Vol.21, No.1, 2002, pp.32-45.
“The Treatment of Natural Monopolies under the Australian Trade Practices Act: Three Recent
Decisions,” (with Frances Hanks and Philip Williams), Australian Business Law Review, Vol.29,
No.6, December, 2001, pp.492-507.
“The Role of Interchange Fees in Credit Card Associations: Competitive Analysis and Regulatory
Options,” (with Stephen King), Australian Business Law Review, Vol.29., No.2, April 2001,
pp.94-122.
“Benefits and Costs of Copyright: An Economic Perspective - Part 2,” (with Megan Richardson,
Frances Hanks and Philip Williams) Australian Intellectual Property Law Bulletin, Vol.13, No.6,
2000, pp.79-92.
“Benefits and Costs of Copyright: An Economic Perspective,” (with Megan Richardson, Frances
Hanks and Philip Williams) Australian Intellectual Property Law Bulletin, Vol.13, No.5, 2000,
pp.62-65.
“Options for Electricity Transmission Regulation in Australia,” (with Stephen King), Australian
Economic Review, Vol.33, No. 2, June 2000, pp.145-161.
“The Competitive Balance Argument for Mergers,” Australian Economic Review, Vol.33, No.1, March
2000, pp.83-93.
“The Role of Undertakings in Regulatory Decision-Making” (with Teresa Fels and Stephen King),
Australian Economic Review, Vol.33, No.1, March 2000, pp.3-16.
“Economic Issues Associated with Access to Electronic Payments Systems,” (with Richard
Scheelings) Australian Business Law Review, Vol.27, No.5, December 1999, pp.373-390.
“Efficient Investment Pricing Rules and Access Regulation” (with Philip Williams), Australian Business
Law Review, Vol.27, No.3, August 1999, pp.267-279.
“Growth in Australian Cities,” (with Rebecca Bradley), Economic Record, Vol.74, No.226, September,
1998, pp.266-278.
“Contracts and Electricity Pool Prices,” (with Danny Price and Kim Woods), Australian Journal of
Management, Vol.23, No.1, June, 1998, pp.83-96.
“Driving the Hard Bargain for Australian R&D,” Prometheus, Vol.16, No.1, March, 1998, pp.47-56.
“Access Regulation and the Timing of Infrastructure Investment,” (with Philip Williams), Economic
Record, Vol.75, No.228, March 1999, pp.39-49.
“Does Australia Really Need to Encourage its Innovators to Commercialise In-House?” Policy,
Vol.13, No.4, March 1998, pp.36-40.
“Of Grand Prix and Circuses,” Australian Economic Review, No.155, 3rd Quarter 1996, pp.299-307.
“Comparative Statics Made Simple: An Introduction to Recent Advances,” Australian Economic Papers,
June 1996, pp.81-93.
“Inside the Black Box: A Look at the Container,” Prometheus, Vol.13, No.2, December 1995, pp.169-
183.
“Chaos Theory, Nonlinearities and Economics: A Speculative Note,” Economic Papers, Vol.10, No.1,
March 1991, pp.40-53.

Book Chapters
“Wireless Communications,” (with Stephen King and Julian Wright) Handbook of Telecommunications
Economics, North-Holland, 2004 (forthcoming).
“Regulating Interconnection Pricing,” (with Stephen King), Australian Telecommunications Regulation, A.
Grant (ed.), UNSW Press: Sydney, 2003.
“Innovation and Market Structure in General Equilibrium,” (with Robin Stonecash), in A. Woodland
(ed.), International Trade and Economic Theory: Essays in Honor of Murray Kemp, Edward Elgar:
Cheltnam, 2001, pp.181-191.

8
 “Engendering Change,” in S. Keen et.al. (eds.), Commerce, Complexity, and Evolution, Cambridge
University Press: New York, 2000, Chpt 19, pp.391-414.
“A Strategic Theory of In-House Research and Development,” in S. MacDonald and J. Nightingale
(eds.), Information and Organization, Elsevier: Amsterdam, 1999, pp.167-182.
“A Primer on Access Regulation and Investment” (with Philip Williams), in M. Arblaster and M.
Jamison (eds.), Infrastructure Regulation and Market Reform: Principles and Practice, ACCC/PURC:
Melbourne, 1998, pp.150-160.
“Industrialisation Policy and the Big Push,” in K.J. Arrow et.al. (eds.) Increasing Returns and Economic
Analysis, Macmillan: London, 1998, Chpt 13.

Working Papers
“Options for Housing Policy for Low Income Households,” (with Stephen King), Working Paper,
Menzies Research Centre, 2003.
“Assessing Australia’s Innovative Capacity in the 21st Century,” (with Scott Stern), Working Paper,
MBS.
“Extending Market Power through Vertical Integration,” (with Catherine de Fontenay), Working
Paper, 99-2, MBS, February 1999
“Incentive Contracts, Optimal Penalties and Enforcement,” Working Paper, No.6, MBS, January
1998.
“The Allocation of Decisions in Organizations,” (with Susan Athey, Scott Schaefer and Scott Stern)
Discussion Paper, No.1322, Graduate School of Business, Stanford University, October 1994.
“Monopolistic Competition a la Dixit and Stiglitz (and its Applications),” Working Paper, No.9409,
Department of Economics, University of New South Wales, October 1994.
“The Cyclical Responsiveness of Shifts in Employment Over Sectors,” (with Roberto Mazzoleni),
Quaderni Dell'Istituteo Di Scienze Economiche e Finanziarie, No.15, Universita Degli Studi Di
Cagliari Sacolta Di Scienze Politiche, January 1993, 19pp.

Articles

“Surprising and Nobel rejections,” Australian Financial Review, 25th October, 1995, p.19.
“Playing off the States delivers a grand prix,” Australian Financial Review, 7th March, 1996, p.17.
“The inventive alternative,” Australian Financial Review, 12th June, 1997, p.19.
“Privatisation debate futile,” Australian Financial Review, 14th July, 1997, p.17
“Illegal drugs: the supply side,” Australian Financial Review, 27th August, 1997, p.20.
“A paparazzi-free environment,” Australian Financial Review, 8th September, 1997, p.16.
“By and buy, Yule regret it,” Australian Financial Review, 26th November, 1997, p.33.
“Tracks of your tears -- Choosing CDs” Australian Financial Review, Wednesday 31st December, 1997,
p.9.
“When being first doesn’t pay,” (with Stephen King), Australian Financial Review, Friday 30th January,
1998, p.32.
“Libraries and Banks and Cyberspace Challenge,” Issues, Vol.30, September, 1998, p.2.
“Does Sony Realise the Game it is Playing,” The Manager, March 1999 (on-line).
“The Failure of Language in Anti-trust Debate,” The Manager, April 2000 (on-line).
“Stephen King’s Game of Horror,” The Manager, August 2000 (on-line).
“Managing Ideas: Commercialization Strategies for Biotechnology,” The ICFAI Journal of Intellectual
Property Rights, Vol.II, No.2, May 2003, pp.17-28.
“Auction tips takes a hammering,” Herald Sun, 25th August 2003.
“Petrol deals a blow to the average consumer,” (with Stephen King), Australian Financial Review, 20th
August 2003.
“Housing lifelines would rescue many,” (with Stephen King) Australian Financial Review, 6th August,
2003.

9
 “Internet auctions fairer for all,” Herald Sun, 14th August 2003, p.18.
“The Case for Credit Card Reform: A Primer for Students,” Ecodate, July 2003.
“Is it Time to take an Access Holiday?” (with Stephen King) The Pipeliner, 2003.
“Internet auctions fairer for all,” Herald Sun, 14th August 2003, p.18.
“Petrol deals a blow to the average consumer,” (with Stephen King), Australian Financial Review, 20th
“A measure of all things innovative,” Australian Financial Review, 17th May, 2004.
“Talking in billions,” Campus Review, 19th May, 2004, p.5.
“System Blocks Better Health Care,” (with Stephen King) Australian Financial Review, 22nd March 2004.
“Does the winner really take it all?” The Age, 21st August, 2004, p.17.
“Who are you insuring anyway?” The Age, 28th August, 2004, p.21.
“Cost-plus, haggle-minus,” The Age, 4th September, 2004, p.18.
“Integration sometimes stacks up,” Australian Financial Review, 6th September, 2004.
“Bundled bidding,” The Age, 11th September, 2004.

Book Chapters
“Wireless Communications,” (with Stephen King and Julian Wright) Handbook of Telecommunications
Economics, North-Holland, 2004 (forthcoming).
“Regulating Interconnection Pricing,” (with Stephen King), Australian Telecommunications Regulation, A.
Grant (ed.), UNSW Press: Sydney, 2003.
“Innovation and Market Structure in General Equilibrium,” (with Robin Stonecash), in A. Woodland
(ed.), International Trade and Economic Theory: Essays in Honor of Murray Kemp, Edward Elgar:
Cheltnam, 2001, pp.181-191.
“Engendering Change,” in S. Keen et.al. (eds.), Commerce, Complexity, and Evolution, Cambridge
University Press: New York, 2000, Chpt 19, pp.391-414.
“A Strategic Theory of In-House Research and Development,” in S. MacDonald and J. Nightingale
(eds.), Information and Organization, Elsevier: Amsterdam, 1999, pp.167-182.
“A Primer on Access Regulation and Investment” (with Philip Williams), in M. Arblaster and M.
Jamison (eds.), Infrastructure Regulation and Market Reform: Principles and Practice, ACCC/PURC:
Melbourne, 1998, pp.150-160.
“Industrialisation Policy and the Big Push,” in K.J. Arrow et.al. (eds.) Increasing Returns and Economic
Analysis, Macmillan: London, 1998, Chpt 13.

Working Papers
“Options for Housing Policy for Low Income Households,” (with Stephen King), Working Paper,
Menzies Research Centre, 2003.
“Assessing Australia’s Innovative Capacity in the 21st Century,” (with Scott Stern), Working Paper,
IPRIA, 2003.
“Extending Market Power through Vertical Integration,” (with Catherine de Fontenay), Working
Paper, 99-2, MBS, February 1999
“Incentive Contracts, Optimal Penalties and Enforcement,” Working Paper, No.6, MBS, January
1998.
“The Allocation of Decisions in Organizations,” (with Susan Athey, Scott Schaefer and Scott Stern)
Discussion Paper, No.1322, Graduate School of Business, Stanford University, October 1994.
“Monopolistic Competition a la Dixit and Stiglitz (and its Applications),” Working Paper, No.9409,
Department of Economics, University of New South Wales, October 1994.
“The Cyclical Responsiveness of Shifts in Employment Over Sectors,” (with Roberto Mazzoleni),
Quaderni Dell'Istituteo Di Scienze Economiche e Finanziarie, No.15, Universita Degli Studi Di
Cagliari Sacolta Di Scienze Politiche, January 1993, 19pp.

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 Other Professional Activities

Co-Editor, International Journal of Industrial Organization (2005 -)

Co-Editor, Journal of Economics and Management Strategy (2003 -)
Economics Editor, Australian Journal of Management (1997 - 2003)
Board of Editors, Information Economics and Policy (1996 -).
Board of Editors, BE Journals of Economic Analysis and Policy (2001 -)
Book Review Editor (Microeconomics) for the Economic Record (1996 - 1998)
Professional Memberships: Economic Society of Australia, American Economic Association, Econometric
Society.

Languages: Intermediate Japanese

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