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Some Investment and Competition Implications of the Ownership Structure of Overlapping Networks

  • Duarte Brito

    ()

    (Universidade Nova de Lisboa)

  • Pedro Pereira

    ()

    (Autoridade da Concorrência)

In this article we discuss the role of cable television networks and their ownership structure, in promoting competition in the local access market. An upgraded cable network can o¤er telecommunication services, and therefore can compete with the public switched telephone network. First, we show that the joint ownership of a local telephone network and a cable network, compared with separate ownership, may increase or decrease incentives to invest in upgrading the cable television network. Second, we argue that separate ownership of the two networks is important to promote competition in local access. Third, we perform the welfare analysis of the investment decision and the ownership structure.

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Paper provided by Portuguese Competition Authority in its series Working Papers with number 11.

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Length: 34 pages
Date of creation: Feb 2006
Date of revision:
Handle: RePEc:pca:wpaper:11
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