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Efficient contracts for government intervention in promoting next generation communications networks

Wolfgang Briglauer and Christian Holzleitner

No 14-022, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: Although the future socio-economic benefits of a new fibre-based ('next generation access', NGA) telecommunications infrastructure seem to be uncontroversial, a universal NGA coverage appears to be a rather unrealistic objective without government intervention. We contend, however, that the current contract practice of fixing ex ante targets for network expansion is inefficient given the uncertainty about future returns on NGA infrastructure-based services and the public authorities' incomplete information about the capital costs of the network provider. This paper puts forward to delegate the choice of the network expansion to the NGA provider.

Keywords: contract theory; public utilities; next generation telecommunications networks; subsidies (search for similar items in EconPapers)
JEL-codes: H20 L43 L44 L51 L52 L96 (search for similar items in EconPapers)
Date: 2014
New Economics Papers: this item is included in nep-ict and nep-reg
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:zewdip:14022

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