Next Generation Access Networks: The Effects of Vertical Spillovers on Access and Innovation

Paula Sarmento and Antonio Brandao

FEP Working Papers from Universidade do Porto, Faculdade de Economia do Porto

Abstract: The model that we develop here considers that an upstream firm sells a vital input to downstream firms. There are vertical spillovers and two different regulatory policies of the input price: cost oriented regulation and no-regulation. We also admit two alternative market structures: vertical integration and vertical separation. With this setting we study the effects of the spillovers on foreclosure and on the investment of the upstream firm with and without access price regulation in the two market structures. We conclude that in this setting foreclosure is not a necessary outcome and that the investment of the upstream firm depends on the values of the spillovers of each firm. The increase of the investment with regulation is more likely with vertical separation but it can also happen with vertical integration although this is not a typical result.

Keywords: access price regulation; vertical integration (search for similar items in EconPapers)
JEL-codes: L51 L96 (search for similar items in EconPapers)
Pages: 14 pages
Date: 2009-04
New Economics Papers: this item is included in nep-com, nep-mic and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:por:fepwps:321

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