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The race for telecoms infrastructure investment with bypass: Can access regulation achieve the first best?

João Vareda () and Steffen Hoernig ()

FEUNL Working Paper Series from Universidade Nova de Lisboa, Faculdade de Economia

Abstract: We analyze the impact of mandatory access on the infrastructure investments of two competing communications networks, and show that for low (high) access charges ?rms wait (preempt each other). Contrary to previous results, under preemption a higher access charge can delay ?rst investment. While ?rst-best investment cannot be achieved with a ?xed access tari¤, simple instruments such as banning access in the future, or granting access holidays right after investment, can improve e¢ ciency. The former forces investment when it would happen too late, while the latter allows for lower access charges in order to delay the second investment when it would happen too early.

New Economics Papers: this item is included in nep-com, nep-mic and nep-reg
Date: 2007
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http://fesrvsd.fe.unl.pt/WPFEUNL/WP2007/wp524.pdf

Related works:
Working Paper: The Race for Telecoms Infrastructure Investment with Bypass: Can Access Regulation Achieve the First-best? (2007) Downloads
Working Paper: The race for telecoms infrastructure investment with bypass: Can access regulation achieve the first best? (2007) Downloads
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