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

Rainer Nitsche and Lars Wiethaus
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Rainer Nitsche: ESMT European School of Management and Technology
Lars Wiethaus: ESMT European School of Management and Technology

No ESMT-09-003, ESMT Research Working Papers from 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.

Keywords: regulation; competition; telecommunications; broadband; strategic investment (search for similar items in EconPapers)
JEL-codes: K23 L10 L51 L96 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2009-07-01
New Economics Papers: this item is included in nep-reg
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Citations: View citations in EconPapers (4)

Published in International Journal of Industrial Organization 29(2): 263-272

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http://static.esmt.org/publications/workingpapers/ESMT-09-003.pdf First version, 2009 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:esm:wpaper:esmt-09-003

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