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Cooperative investment, access, and uncertainty

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  • Bourreau, Marc
  • Cambini, Carlo
  • Hoernig, Steffen

Abstract

This paper compares the impacts of traditional one-way access obligations and the new regulatory scheme of co-investment on the roll-out of network infrastructures. We show that compulsory access leads to smaller roll-out, first because it reduces the returns from investment, and second because in the presence of uncertainty it provides access seekers with an option whose exercise hurts investors. Co-investment without access obligations leads to risk sharing and eliminates the access option, implying highest network coverage. Allowing for access on top of co-investment actually decreases welfare if the access price is low.

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  • Bourreau, Marc & Cambini, Carlo & Hoernig, Steffen, 2018. "Cooperative investment, access, and uncertainty," International Journal of Industrial Organization, Elsevier, vol. 56(C), pages 78-106.
    • Handle: RePEc:eee:indorg:v:56:y:2018:i:c:p:78-106
    DOI: 10.1016/j.ijindorg.2017.11.004
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    Cited by:

    1. Aimene, Louise & Lebourges, Marc & Liang, Julienne, 2019. "Estimating the impact of co-investment on fiber to the home coverage, adoption and competition," 30th European Regional ITS Conference, Helsinki 2019 205160, International Telecommunications Society (ITS).
    2. Bourreau, Marc & Grzybowski, Lukasz & Hasbi, Maude, 2019. "Unbundling the incumbent and deployment of high-speed internet: Evidence from France," International Journal of Industrial Organization, Elsevier, vol. 67(C).
    3. Vogelsang, Ingo, 2019. "Has Europe missed the endgame of telecommunications policy?," Telecommunications Policy, Elsevier, vol. 43(1), pages 1-10.
    4. Bourreau, Marc & Cambini, Carlo & Hoernig, Steffen & Vogelsang, Ingo, 2021. "Co-investment, uncertainty, and opportunism:ex-Ante and ex-Post remedies," Information Economics and Policy, Elsevier, vol. 56(C).
    5. Houngbonon, Georges Vivien & Ivaldi, Marc & Palikot, Emil & Strusani, Davide, 2023. "The Impact of Shared Telecom Infrastructure on Digital Connectivity and Inclusion," TSE Working Papers 23-1427, Toulouse School of Economics (TSE).
    6. Houngbonon, Georges V. & Ivaldi, Marc & Palikot, Emil & Strusani, Davide, 2023. "The Impact of Shared Telecom Infrastructure on Digital Connectivity and Inclusion," 32nd European Regional ITS Conference, Madrid 2023: Realising the digital decade in the European Union – Easier said than done? 277970, International Telecommunications Society (ITS).
    7. David Henriques, 2021. "Access Prices Indexed to Geographical Coverage of Innovative Telecom Services," Journal of Industry, Competition and Trade, Springer, vol. 21(1), pages 123-138, March.
    8. Aimene, Louise & Lebourges, Marc & Liang, Julienne, 2021. "Estimating the impact of co-investment on Fiber to the Home adoption and competition," Telecommunications Policy, Elsevier, vol. 45(10).
    9. Briglauer, Wolfgang & Cambini, Carlo & Fetzer, Thomas & Hüschelrath, Kai, 2017. "The European Electronic Communications Code: A critical appraisal with a focus on incentivizing investment in next generation broadband networks," Telecommunications Policy, Elsevier, vol. 41(10), pages 948-961.
    10. Lebourges, Marc & Liang, Julienne, 2018. "Estimating the impact of co-investment in fiber to the home coverage," 29th European Regional ITS Conference, Trento 2018 184953, International Telecommunications Society (ITS).
    11. Cojoc, Anca & Ivaldi, Marc & Maier-Rigaud, Frank P. & März, Oliver, 2020. "Horizontal cooperation on investment: Evidence from mobile network sharing," TSE Working Papers 20-1100, Toulouse School of Economics (TSE).
    12. Ivaldi, Marc & Aimene, Louise & Jeanjean, Francois & Liang, Julienne, 2021. "The impact of RAN sharing," 23rd ITS Biennial Conference, Online Conference / Gothenburg 2021. Digital societies and industrial transformations: Policies, markets, and technologies in a post-Covid world 238031, International Telecommunications Society (ITS).
    13. Josep Maria Izquierdo & Carlos Rafels, 2020. "Core Allocations in Co-investment Problems," Group Decision and Negotiation, Springer, vol. 29(6), pages 1157-1180, December.
    14. Marc Bourreau & Carlo Cambini & Steffen Hoernig & Ingo Vogelsang, 2020. "Fiber investment and access under uncertainty: long-term contracts, risk premia, and access options," Journal of Regulatory Economics, Springer, vol. 57(2), pages 105-117, April.
    15. López, Ángel L. & Manganelli, Anton-Giulio & Martín-Rodríguez, María, 2022. "Co-investment deterrence," Economics Letters, Elsevier, vol. 211(C).
    16. Abrardi, Laura & Cambini, Carlo, 2019. "Ultra-fast broadband investment and adoption: A survey," Telecommunications Policy, Elsevier, vol. 43(3), pages 183-198.
    17. Bourreau, Marc & Lestagey, Romain, 2018. "Access and Cooperative Investment under Asymmetric Infrastructure Competition," 22nd ITS Biennial Conference, Seoul 2018. Beyond the boundaries: Challenges for business, policy and society 190375, International Telecommunications Society (ITS).
    18. Jeanjean, Francois, 2022. "Co-investment in the sharing of Telecommunications Infrastructures," 31st European Regional ITS Conference, Gothenburg 2022: Reining in Digital Platforms? Challenging monopolies, promoting competition and developing regulatory regimes 265636, International Telecommunications Society (ITS).

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    More about this item

    Keywords

    Co-investment; Access obligations; Next generation networks; Uncertainty;
    All these keywords.

    JEL classification:

    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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