The Race for Telecoms Infrastructure Investment with Bypass: Can Access Regulation Achieve the First-best?

Steffen Hoernig and João Vareda ()

No 6203, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We analyze the impact of mandatory access on the infrastructure investments of two competing communications networks, and show that for low (high) access charges firms wait (preempt each other). Contrary to previous results, under preemption a higher access charge can delay first investment. Constant access tariffs cannot achieve the first best. Optimal time-variant access tariffs may be increasing or decreasing over time. The first-best cannot be achieved at all through access tariff regulation if the follower?s private incentives are dominated by business-stealing. Here access holidays can improve welfare by allowing for lower future access charges, which delay the second investment.

Keywords: Access holidays; Investments; Preemption; Time-variant access charges (search for similar items in EconPapers)
JEL-codes: D92 L43 L51 L96 (search for similar items in EconPapers)
Date: 2007-03
New Economics Papers: this item is included in nep-com, nep-mic, nep-net and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

Downloads: (external link)
https://cepr.org/publications/DP6203 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Working Paper: The race for telecoms infrastructure investment with bypass: Can access regulation achieve the first best? (2007)
Working Paper: The race for telecoms infrastructure investment with bypass: can access regulation achieve the first best? (2007)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:6203

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP6203

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().