A critical review of the "ladder of investment" approach

Marc Bourreau, Pinar Dogan () and Matthieu Manant ()

Telecommunications Policy, 2010, vol. 34, issue 11, 683-696

Abstract: The "ladder of investment" is a regulatory approach proposed by Cave (2006), which has been widely embraced by national regulatory authorities in the European telecommunications sector. The approach entails providing entrants, successively, with different levels of access--the "rungs" of the investment ladder, while inducing them to climb the ladder by setting an access charge that increases over time or by withdrawing access obligations after some pre-determined date (i.e., by setting sunset clauses). Proponents of the ladder of investment approach claim that such regulatory measures would make service-based entry and facility-based entry complements--albeit they have been traditionally viewed as substitutes--in promoting competition. The regulators, thus, have shown a strong interest in this approach. The paper provides a critical review of the ladder of investment approach by setting out its two underlying assumptions and discussing their validity with references to the related industrial organization literature.

Keywords: Ladder; of; investment; Facility-based; competition; Telecommunications (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (65)

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Working Paper: A critical review of the “ladder of investment” approach (2010)
Working Paper: A critical review of the ladder of investment approach
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