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A critical review of the "ladder of investment" approach

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  • Bourreau, Marc
  • Dogan, PInar
  • Manant, Matthieu

Abstract

The "ladder of investment" is a regulatory approach proposed by Cave (2006), which has been widely embraced by national regulatory authorities in the European telecommunications sector. The approach entails providing entrants, successively, with different levels of access--the "rungs" of the investment ladder, while inducing them to climb the ladder by setting an access charge that increases over time or by withdrawing access obligations after some pre-determined date (i.e., by setting sunset clauses). Proponents of the ladder of investment approach claim that such regulatory measures would make service-based entry and facility-based entry complements--albeit they have been traditionally viewed as substitutes--in promoting competition. The regulators, thus, have shown a strong interest in this approach. The paper provides a critical review of the ladder of investment approach by setting out its two underlying assumptions and discussing their validity with references to the related industrial organization literature.

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Bibliographic Info

Article provided by Elsevier in its journal Telecommunications Policy.

Volume (Year): 34 (2010)
Issue (Month): 11 (December)
Pages: 683-696

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Handle: RePEc:eee:telpol:v:34:y:2010:i:11:p:683-696

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Keywords: Ladder of investment Facility-based competition Telecommunications;

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Cited by:
  1. Bauer, Johannes M. & Shim, Woohyun, 2012. "Regulation and digital innovation: Theory and evidence," 23rd European Regional ITS Conference, Vienna 2012 60364, International Telecommunications Society (ITS).
  2. Maya Bacache & Marc Bourreau & Germain Gaudin, 2014. "Dynamic Entry and Investment in New Infrastructures: Empirical Evidence from the Fixed Broadband Industry," Review of Industrial Organization, Springer, vol. 44(2), pages 179-209, March.
  3. Fabio Manenti & Antonio Scialà, 2011. "Access Regulation, Entry, and Investment in Telecommunications," RSCAS Working Papers 2011/37, European University Institute.
  4. François Jeanjean & Julienne Liang, 2012. "Role of access charges in the migration from copper to FTTH," International Journal of Management and Network Economics, Inderscience Enterprises Ltd, vol. 2(3), pages 298-317.
  5. 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).
  6. 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).
  7. Bourreau, Marc & Cambini, Carlo & Doğan, Pınar, 2012. "Access pricing, competition, and incentives to migrate from “old” to “new” technology," International Journal of Industrial Organization, Elsevier, vol. 30(6), pages 713-723.
  8. Wolfgang Briglauer, 2014. "The impact of regulation and competition on the adoption of fiber-based broadband services: recent evidence from the European union member states," Journal of Regulatory Economics, Springer, vol. 46(1), pages 51-79, August.
  9. Howell, Bronwyn, 2012. "Competition and Regulation Policy in Antipodean Government-Funded UltraFast Fibre Broadband Markets," Working Paper Series 2787, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.
  10. Calzada, Joan & Martínez-Santos, Fernando, 2014. "Broadband prices in the European Union: Competition and commercial strategies," Information Economics and Policy, Elsevier, vol. 27(C), pages 24-38.
  11. Pier Luigi Parcu, 2013. "Electronic Communications Regulation in Europe: An Overview of Past and Future Problems," RSCAS Working Papers 2013/92, European University Institute.
  12. Marc Bourreau & Joeffrey Drouard, 2014. "Progressive entry and the incentives to invest in alternative infrastructures," Post-Print hal-01016366, HAL.
  13. Naoaki Minamihashi, 2012. "Natural Monopoly and Distorted Competition: Evidence from Unbundling Fiber-Optic Networks," Working Papers 12-26, Bank of Canada.
  14. Flacher, David & Jennequin, Hugues, 2012. "Access regulation and geographic deployment of a new generation infrastructure," 19th ITS Biennial Conference, Bangkok 2012: Moving Forward with Future Technologies - Opening a Platform for All 72537, International Telecommunications Society (ITS).
  15. 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.

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