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Access regulation and investment in next generation networks -- A ranking of regulatory regimes

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  • Nitsche, Rainer
  • Wiethaus, Lars
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    Abstract

    This paper analyses how different types of access regulation to next generation networks affect investments and consumer welfare. The model consists of an investment stage with uncertain returns and subsequent quantity competition. The access price is a function of investment costs and the regulatory regime. A regime with fully distributed costs or a regulatory holiday induces highest investments, followed by risk-sharing and long run incremental costs regulation. Simulations indicate that risk-sharing creates most consumer welfare, followed by regimes with fully distributed costs, regulatory holiday and long run incremental costs, respectively. Risk-sharing benefits consumers as it combines relatively high ex-ante investment incentives with strong ex-post competitive intensity.

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    Bibliographic Info

    Article provided by Elsevier in its journal International Journal of Industrial Organization.

    Volume (Year): 29 (2011)
    Issue (Month): 2 (March)
    Pages: 263-272

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    Handle: RePEc:eee:indorg:v:29:y:2011:i:2:p:263-272

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    Web page: http://www.elsevier.com/locate/inca/505551

    Related research

    Keywords: Regulation Competition Telecommunications Broadband Strategic investment;

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    Cited by:
    1. Inderst, Roman & Peitz, Martin, 2012. "Network Investment, Access and Competition," MPRA Paper 53842, University Library of Munich, Germany.
    2. Balmer, Roberto, 2013. "Geographic Regulation and Cooperative Investment in Next Generation Broadband Networks - A Review of Recent Literature and Practical Cases," MPRA Paper 54080, University Library of Munich, Germany.
    3. Pier Luigi Parcu, 2013. "Electronic Communications Regulation in Europe: An Overview of Past and Future Problems," RSCAS Working Papers 2013/92, European University Institute.
    4. Stühmeier, Torben, 2012. "Roaming and Investments in the Mobile Internet Market," DICE Discussion Papers 46, Heinrich‐Heine‐Universität Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    5. Cambini, Carlo & Silvestri, Virginia, 2012. "Technology investment and alternative regulatory regimes with demand uncertainty," Information Economics and Policy, Elsevier, vol. 24(3), pages 212-230.
    6. Romain Lestage & David Flacher, 2011. "Access Regulation and Welfare," TEMEP Discussion Papers 201185, Seoul National University; Technology Management, Economics, and Policy Program (TEMEP), revised Dec 2011.
    7. Inderst, Roman & Peitz, Martin, 2013. "Investment under uncertainty and regulation of new access networks," ZEW Discussion Papers 13-020, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    8. Parcu, Pier Luigi & Silvestri, Virginia, 2013. "Electronic communications regulation in Europe: An overview of past and future problems," 24th European Regional ITS Conference, Florence 2013 88509, International Telecommunications Society (ITS).
    9. Bourreau, Marc & Cambini, Carlo & Dogan, Pinar, 2011. "Access Pricing, Competition, and Incentives to Migrate From "Old" to "New" Technology," Scholarly Articles 5098425, Harvard Kennedy School of Government.
    10. Briglauer, Wolfgang, 2013. "The impact of regulation and competition on the adoption of fibre-based broadband services: Recent evidence from the European Union member states," 24th European Regional ITS Conference, Florence 2013 88494, International Telecommunications Society (ITS).
    11. Brito, Duarte & Pereira, Pedro & Vareda, João, 2012. "Incentives to invest and to give access to non-regulated new technologies," Information Economics and Policy, Elsevier, vol. 24(3), pages 197-211.
    12. Marc Bourreau & Joeffrey Drouard, 2014. "Progressive entry and the incentives to invest in alternative infrastructures," Journal of Regulatory Economics, Springer, vol. 45(3), pages 329-351, June.

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