Access Regulation, Entry and the Investment Ladder in Telecommunications

Fabio Manenti () and Antonio Sciala' ()
Additional contact information
Antonio Sciala': Universita' Roma Tre
Authors registered in the RePEc Author Service: Antonio Sciala'

No 120, "Marco Fanno" Working Papers from Dipartimento di Scienze Economiche "Marco Fanno"

Abstract: This paper presents a model of competition between an incumbent and an entrant firm in telecommunications. The entrant has the option to enter the market with or without having preliminary invested in its own infrastructure; in case of facility based entry, the entrant has also the option to invest in the provision of enhanced services. In case of resale based entry the entrant needs access to the incumbent network. Unlike the rival, the incumbent has always the option to upgrade the existing network to provide advanced services. We study the impact of access regulation on the type of entry and on firms' investments. Without regulation, we find that the incumbent sets the access charge to prevent resale based entry and this overstimulates rival's investment that may turn out to be socially inefficient. Access regulation may discourage welfare enhancing investments, thus also inducing a socially inefficient outcome. We extend the model to account for negotiated interconnection in case of facilities based entry.

Keywords: telecommunications; ladder of investment; access regulation; interconnection. (search for similar items in EconPapers)
JEL-codes: L51 L86 L96 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2010-09
New Economics Papers: this item is included in nep-com, nep-ind and nep-reg
References: View complete reference list from CitEc
Citations:

Downloads: (external link)
https://economia.unipd.it/sites/economia.unipd.it/files/20100120.pdf (application/pdf)

Related works:
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:pad:wpaper:0120

Access Statistics for this paper

More papers in "Marco Fanno" Working Papers from Dipartimento di Scienze Economiche "Marco Fanno" Contact information at EDIRC.
Bibliographic data for series maintained by Raffaele Dei Campielisi ().