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Some Investment and Competition Implications of the Ownership Structure of Overlapping Networks

Duarte Brito and Pedro Pereira

No 11, Working Papers from Portuguese Competition Authority

Abstract: In this article we discuss the role of cable television networks and their ownership structure, in promoting competition in the local access market. An upgraded cable network can o¤er telecommunication services, and therefore can compete with the public switched telephone network. First, we show that the joint ownership of a local telephone network and a cable network, compared with separate ownership, may increase or decrease incentives to invest in upgrading the cable television network. Second, we argue that separate ownership of the two networks is important to promote competition in local access. Third, we perform the welfare analysis of the investment decision and the ownership structure.

Keywords: Cable Networks; Local Access; Competition (search for similar items in EconPapers)
JEL-codes: L43 L96 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com, nep-cse and nep-mic
Date: 2006-02
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