1,721,008 research outputs found
Access Pricing, Competition, and Incentives to Migrate From“Old” to “New” Technology - Harvard Kennedy School of Government RWP11-029
Full text linkIn this paper, we analyze the incentives of an incumbent and an entrant to migrate from an
“old” technology to a “new” technology, and discuss how the terms of wholesale access affect
this migration. We show that a higher access charge on the legacy network pushes the entrant
firm to invest more, but has an ambiguous effect on the incumbent’s investments, due to two
conflicting effects: the wholesale revenue effect, and the business migration effect. If both the
old and the new infrastructures are subject to ex-ante access regulation, we also find that the
two access charges are positively correlated
Fixed-Mobile Integration
No full textOften, fixed-line incumbents also own the largest mobile network. We consider the effect of this joint ownership on market outcomes. Our model predicts that while fixed-to-mobile call prices to the integrated mobile network are more efficient than under separation, those to rival mobile networks are distorted upwards, amplifying any incumbency advantage. As concerns potential remedies, a uniform off-net pricing constraint leads to higher welfare than functional separation and even allows to maintain some of the efficiency gains
Ex-ante Regulation and Co-investment in the Transition to Next Generation Access
Full text linkInvestments in Next Generation Access Networks (NGANs) ask for a new set of regulatory remedies. This paper contributes to this debate by focusing on three issues: the migration from the legacy copper network to the NGA infrastructure, and how wholesale pricing regulation might affect this process; the introduction of differentiated wholesale remedies according to geographical differences in NGAN deployment; the impact of co-investment decisions on market outcomes and their interplay with access regulation. Using the recent economic literature, we discuss arguments and proposals for guidelines that might be useful to regulators and policy makers
Geographic Access Markets and Investments
No full textWe analyze the adoption of access regimes that differ according to the prevailing degree of infrastructure competition in different geographical areas of a country. Our results show that, compared to a uniform access price, geographically differentiated access prices improve welfare and incentivize investment. However, when access provision in areas with infrastructure competition is deregulated, welfare might decrease, because multiple inefficient equilibria at the wholesale level emerge, with either too
little or too much investmen
National FTTH Plans in France, Italy and Portugal
No full textIn this paper, we analyse the specific national broadband plans which have
been developed by some European governments to foster the deployment of next
generation access networks, namely in France, Italy, and Portugal. In particular, we
discuss the strategies adopted to achieve wide fibre coverage and encourage coinvestment
between competing operators. Finally, we highlight the similarities and
differences between the strategies followed in these three countries
Geographic Access Rules and Investment
No full textWe analyze competition between vertically integrated infrastructure operators
that provide access in different geographical areas. A regulator may impose a
uniform access price, set local access rates, or deregulate access locally. We
analyze the impact of these alternative regulatory regimes on network
investments. While cost-based access leads to both suboptimal rollout and
duplication, uniform access prices bring too much duplication. Deregulation in
competitive areas can spur investment and lead to social optimum, or call for
continued regulatory intervention, depending on the resulting wholesale
equilibrium
Price Distortion under Fixed-Mobile Substitution
No full textThis paper analyses the impact of substitution between fixed and mobile telephony on call prices. We develop a model where consumers differ in the benefits of mobility and firms price discriminate between on-net and off-net calls. We find that call prices are distorted downwards due to substitution possibilities and customer heterogeneity, and that this distortion increases with the fixed-mobile termination mark-up
Cooperative Investment, Uncertainty and Access
No full textWe investigate cooperative investment for the deployment of a new infrastructure, and how it interacts with access obligations and demand uncertainty. Co-investment increases total coverage only if service differentiation and/or cost savings from joint investment, in particular due to high uncertainty, are high. Mandated access reduces incentives for coinvestment not only through lower returns but also by the existence of the access option itself. Voluntary access provision increases infrastructure
coverage but reduces social welfare by softening competition
Cooperative Investment, Access, and Uncertainty
No full textThis paper compares the impacts of traditional one–way access obligations and the new regulatory scheme of co-investment on the roll-out of network infrastructures. We show that compulsory access leads to smaller roll-out, first because it reduces the returns from investment, and second because in the presence of uncertainty it provides access seekers with an option whose exercise hurts investors. Co-investment without access obligations leads to risk sharing and eliminates the access option, implying highest network coverage. Allowing for access on top of co-investment actually decreases welfare if the access price is low
Co-investment, uncertainty, and opportunism:ex-Ante and ex-Post remedies
Full text linkCaused largely by the recent technological changes towards digitalization, infrastructure investment in network industries has become the main issue for regulatory intervention. In this paper, we study the impact of co-investment between an incumbent and an entrant on the roll-out of network infrastructures under demand uncertainty. We show that if the entrant can wait to co-invest until demand is realized, the incumbent's investment incentives are reduced, and total coverage can be lower than in a benchmark with earlier co-investment. We consider two remedies to correct these distortions: (i) co-investment options purchased ex ante by the entrant from the incumbent, and (ii) risk premia paid ex post by the entrant. We show that co-investment options cannot fully reestablish total coverage, while premia can do so in most cases, though at the cost of less entry. Finally, we show that an appropriate combination of ex-ante and ex-post remedies can improve welfare
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