 Can two-part tariffs promote efficient investment on next generation networks?Duarte Brito, Pedro Pereira and João Vareda () International Journal of Industrial Organization, 2010, vol. 28, issue 3, 323-333 Abstract: We analyze if two-part access tariffs solve the dynamic consistency problem of the regulation of next generation networks. We model the industry as a duopoly, where a vertically integrated incumbent and a downstream entrant, that requires access to the incumbent's network, compete on Hotelling's line. The incumbent can invest in the deployment of a next generation network that improves the quality of the retail services. We have three main results. First, we show that if the regulator can commit to a policy, a regulatory moratorium may emerge as socially optimal. Second, we show that if the regulator cannot commit to a policy, it can induce investment only when the investment cost is low. Third, we show that in this case, two-part tariffs involve very large payments from the entrant to the incumbent. Keywords: Next; generation; networks; Investment; Regulation; Dynamic; consistency (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:indorg:v:28:y:2010:i:3:p:323-333 Access Statistics for this article International Journal of Industrial Organization is currently edited by P. Bajari, B. Caillaud and N. Gandal More articles in International Journal of Industrial Organization from Elsevier |
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