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Access Pricing, Competition, and Incentives to Migrate from "Old" to "New" Technology

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Author Info

  • Bourreau, Marc

    (Telecom ParisTech and CREST-LEI, Paris)

  • Cambini, Carlo

    (Polytechnic University of Turin)

  • Dogan, Pinar

    (Harvard University)

Abstract

In 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.

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Bibliographic Info

Paper provided by Harvard University, John F. Kennedy School of Government in its series Working Paper Series with number rwp11-029.

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Date of creation: Jul 2011
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Handle: RePEc:ecl:harjfk:rwp11-029

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References

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  1. Koutroumpis, Pantelis, 2009. "The economic impact of broadband on growth: A simultaneous approach," Telecommunications Policy, Elsevier, vol. 33(9), pages 471-485, October.
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  23. Dogan, Pinar & Bourreau, Marc & Manant, Matthieu, 2010. "A Critical Review of the “Ladder of Investment†Approach," Scholarly Articles 4777447, Harvard Kennedy School of Government.
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Citations

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Cited by:
  1. Marc Bourreau & Carlo Cambini & Pınar Doğan, 2014. "Access regulation and the transition from copper to fiber networks in telecoms," Journal of Regulatory Economics, Springer, vol. 45(3), pages 233-258, June.
  2. 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.
  3. Inderst, Roman & Peitz, Martin, 2014. "Investment under uncertainty and regulation of new access networks," Information Economics and Policy, Elsevier, vol. 26(C), pages 28-41.
  4. Pier Luigi Parcu, 2013. "Electronic Communications Regulation in Europe: An Overview of Past and Future Problems," RSCAS Working Papers 2013/92, European University Institute.
  5. Marc Bourreau & Cambini Steffen, 2013. "Geographic Access Rules and Investments," RSCAS Working Papers 2013/28, European University Institute.
  6. 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.
  7. Martin CAVE & Antoine FOURNIER & Natalia SHUTOVA, 2012. "The Price of Copper and the Transition to Fibre," Communications & Strategies, IDATE, Com&Strat dept., vol. 1(85), pages 147-168, 1st quart.
  8. Inderst, Roman & Peitz, Martin, 2012. "Network Investment, Access and Competition," MPRA Paper 53842, University Library of Munich, Germany.
  9. 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.
  10. Neumann, Karl-Heinz & Vogelsang, Ingo, 2013. "How to price the unbundled local loop in the transition from copper to fiber access networks?," 24th European Regional ITS Conference, Florence 2013 88516, International Telecommunications Society (ITS).
  11. Ingo Vogelsang, 2013. "The Endgame of Telecommunications Policy? A Survey," CESifo Working Paper Series 4545, CESifo Group Munich.
  12. Tselekounis, Markos & Xylogianni, Eirini & Varoutas, Dimitris & Martakos, Drakoulis, 2013. "Geographically differentiated NGA deployment," 24th European Regional ITS Conference, Florence 2013 88533, International Telecommunications Society (ITS).
  13. Jaunaux, Laure & Lebourges, Marc, 2013. "Economic replicability tests for next-generation access networks," 24th European Regional ITS Conference, Florence 2013 88501, International Telecommunications Society (ITS).
  14. Christian Bender, 2011. "How to provide access to next generation networks? The effect of risk allocation on investment and cooperation incentives," MAGKS Papers on Economics 201149, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
  15. 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).

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