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Level of Access and Competition in Broadband Markets

Author

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  • Bourreau Marc

    (Telecom Paris Tech)

  • Dogan Pinar

    (Harvard University)

Abstract

We consider an unregulated incumbent who owns a broadband infrastructure and decides on how much access to provide to a potential entrant. The level of access determines the amount of investment the entrant needs to undertake to enter the market, and the intensity of post-entry competition. We show that the equilibrium level of access is higher when the sensitivity of product differentiation to the level of access is lower, and when the investment cost is higher. We also show that the incumbent sets a suboptimally low (high) level of access if the degree of service differentiation is sufficiently high (low).

Suggested Citation

  • Bourreau Marc & Dogan Pinar, 2012. "Level of Access and Competition in Broadband Markets," Review of Network Economics, De Gruyter, vol. 11(1), pages 1-33, March.
    • Handle: RePEc:bpj:rneart:v:11:y:2012:i:1:n:1
    DOI: 10.1515/1446-9022.1339
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    Cited by:

    1. Ricardo GONCALVES & Álvaro NASCIMENTO, 2013. "Next Generation Access Networks: The Post-Investment Conundrum," Communications & Strategies, IDATE, Com&Strat dept., vol. 1(92), pages 91-112, 4th quart.
    2. Renata Sliwa, 2015. "Facility-based competition — toward more deregulation in telecommunications sector," Ekonomia i Prawo, Uniwersytet Mikolaja Kopernika, vol. 14(2), pages 261-273, June.
    3. Marc Bourreau & Pınar Doğan & Romain Lestage, 2014. "Level of access and infrastructure investment in network industries," Journal of Regulatory Economics, Springer, vol. 46(3), pages 237-260, December.

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