Investment under uncertainty and regulation of new access networks

Roman Inderst and Martin Peitz

No 13-020, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: Contractual and regulatory provisions for access affect incentives to invest in an upgraded network and, in particular, a next-generation access network. Investment decisions are made under uncertainty and have to be made over time. This papers provides a framework for taking uncertainty, risk aversion, and the timing of investment explicitly into account. First, it evaluates various access price policies in a framework in which the incremental value over the legacy network is uncertain. Second, introducing risk aversion, the access price structure turns out to be critical for the risk profile of the investing telecom operator and of the access-seeking alternative operator. Third, some implications of the time structure of access payments are derived.

Keywords: NGA; investment under uncertainty; access price rule; telecommunications (search for similar items in EconPapers)
JEL-codes: L1 L5 (search for similar items in EconPapers)
Date: 2013
New Economics Papers: this item is included in nep-com, nep-ict, nep-ind and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Journal Article: Investment under uncertainty and regulation of new access networks (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:zewdip:13020

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