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Access regulation and investment in next generation networks: A ranking of regulatory regimes

Author

Listed:
  • Rainer Nitsche

    (ESMT European School of Management and Technology)

  • Lars Wiethaus

    (ESMT European School of Management and Technology)

Abstract

This paper analyses how different types of access regulation to next generation networks affect investments and consumer welfare. The model consists of an investment stage with uncertain returns and subsequent quantity competition. The access price is a function of investment costs and the regulatory regime. A regime with fully distributed costs or a regulatory holiday induces highest investments, followed by risk-sharing and long-run-incremental cost regulation. Risk-sharing creates most consumer welfare, followed by regimes with fully distributed costs, long-run-incremental costs and regulatory holiday, respectively. Risk-sharing benefits consumers as it combines relatively high ex-ante investment incentives with strong ex-post competitive intensity.

Suggested Citation

  • Rainer Nitsche & Lars Wiethaus, 2009. "Access regulation and investment in next generation networks: A ranking of regulatory regimes," ESMT Research Working Papers ESMT-09-003, ESMT European School of Management and Technology.
    • Handle: RePEc:esm:wpaper:esmt-09-003
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    Cited by:

    1. Ferdinand Pavel & Yann Girard & Arno Hantzsche & Anselm Mattes & Julius Pahlke & Katherina Peter, 2014. "Wachstumsfaktor Telekommunikation: zum Beitrag der Telekommunikationsbranche zur wirtschaftlichen Entwicklung in Deutschland; Endbericht," DIW Berlin: Politikberatung kompakt, DIW Berlin, German Institute for Economic Research, volume 78, number pbk78, January.
    2. Inderst, Roman & Peitz, Martin, 2011. "Netzzugang, Wettbewerb und Investitionen," ZEW Discussion Papers 11-025, ZEW - Leibniz Centre for European Economic Research.
    3. Jaunaux, Laure & Lebourges, Marc, 2015. "Economic replicability tests for next-generation access networks," Telecommunications Policy, Elsevier, vol. 39(6), pages 486-501.
    4. Inderst, Roman & Kühling, Jürgen & Neumann, Karl-Heinz & Peitz, Martin, 2010. "Investitionen, Wettbewerb und Netzzugang bei NGA: Ergebnisse einer Studie im Auftrag des Bundesministeriums für Wirtschaft und Technologie," WIK Discussion Papers 344, WIK Wissenschaftliches Institut für Infrastruktur und Kommunikationsdienste GmbH.

    More about this item

    Keywords

    regulation; competition; telecommunications; broadband; strategic investment;
    All these keywords.

    JEL classification:

    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law

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