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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.

Suggested Citation

  • Jeanjean, François & Liang, Julienne, 2011. "Role of access charges in the migration from copper to FTTH," 8th ITS Asia-Pacific Regional Conference, Taipei 2011: Convergence in the Digital Age 52335, International Telecommunications Society (ITS).
  • Handle: RePEc:zbw:itsp11:52335
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    1. Bourreau, Marc & Dogan, PInar & Manant, Matthieu, 2010. "A critical review of the "ladder of investment" approach," Telecommunications Policy, Elsevier, vol. 34(11), pages 683-696, December.
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    4. Shaked, Avner & Sutton, John, 1987. "Product Differentiation and Industrial Structure," Journal of Industrial Economics, Wiley Blackwell, vol. 36(2), pages 131-146, December.
    5. Johannes Bauer & Erik Bohlin, 2008. "From Static to Dynamic Regulation," Intereconomics: Review of European Economic Policy, Springer;German National Library of Economics;Centre for European Policy Studies (CEPS), vol. 43(1), pages 38-50, January.
    6. 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).
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