Summary

A network externality relates to the additional effects of a user joining a network which the user does not take into account. A user joins a network to obtain a benefit from making and receiving calls and derives a benefit from being part of the communications network. This benefit derives from being able to communicate with other users and increases with the number of users connected to the network: the bigger the network, the more beneficial it is to both existing and potential users. Hence, a user's decision to join a network benefits both them and other users. This Recommendation provides recommendations related to the payment of network externality premiums.