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Role of access charges in the migration from copper to FTTH

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  • Jeanjean, François
  • Liang, Julienne

Abstract

We consider a horizontally and vertically differentiated duopoly model in order to analyze both intra- and inter-platform competition in an always corvered broadband access market (Copper-Copper, Copper-FTTH and FTTH-FTTH competitions). The model is purely static and does not address dynamic efficiency issues. It shows that the access charges play a significant role in the migration from copper to FTTH and in FTTH investment incentives, provided that consumers are segmented. In FTTH-infrastructure-based competition, investment incentives tend to increase with the copper access charge, while in FTTH-servicebased competition, FTTH investment incentives are much more sensitive to the FTTH access charge than to the copper access charge. A comparison of FTTH-infrastructure-based and FTTH-service-based competition in terms of nationwide FTTH coverage and social welfare indicates that FTTH-infrastructure-based competition leads to a higher level of nationwide FTTH coverage and social welfare. --

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Bibliographic Info

Paper provided by International Telecommunications Society (ITS) in its series 8th Asia-Pacific Regional ITS Conference, Taipei 2011: Convergence in the Digital Age with number 52335.

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Date of creation: 2011
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Handle: RePEc:zbw:itsp11:52335

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Web page: http://www.its2011taiwan.com/

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  1. Shaked, Avner & Sutton, John, 1987. "Product Differentiation and Industrial Structure," Journal of Industrial Economics, Wiley Blackwell, vol. 36(2), pages 131-46, December.
  2. M. Bourreau & P. Dogan & M. Manant, . "A critical review of the ladder of investment approach," Working Paper 33654, Harvard University OpenScholar.
  3. Jeanjean, François, 2010. "Competition through Technical Progress," 21st European Regional ITS Conference, Copenhagen 2010: Telecommunications at new crossroads - Changing value configurations, user roles, and regulation 18, International Telecommunications Society (ITS).
  4. 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.
  5. Johannes Bauer & Erik Bohlin, 2008. "From Static to Dynamic Regulation," Intereconomics: Review of European Economic Policy, Springer, vol. 43(1), pages 38-50, January.
  6. John Vickers & Mark Armstrong, 2006. "Competitive Nonlinear Pricing and Bundling," Economics Series Working Papers 281, University of Oxford, Department of Economics.
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