Dynamic access pricing and investment in alternative infrastructures

Avenali, Alessandro; Matteucci, Giorgio; Reverberi, Pierfrancesco

doi:10.1016/j.ijindorg.2009.07.011

Cited by 54 publications

(40 citation statements)

References 25 publications

(23 reference statements)

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“…In a second step, the NRA increases the access charge in order to persuade the new operators to "climb" the ladder of investment by deploying their own infrastructures. Avenali et al [2010] made a contribution to this literature by focusing on the first step of the investment ladder: They assume that rather than being unavoidable (as in Bourreau and Dogan, 2005), deployment of the new entrant's own infrastructure depends on its capacity to build a customer base, which will increase its reputation and brand loyalty, and on the access policy. Like Bourreau and Dogan, 2005, Avenali et al conclude that access charges should increase over time in order to incite competitors to climb the investment ladder.…”

Section: Related Literature 4 Related Literaturementioning

confidence: 99%

“…In this article, and unlike the work of Avenali et al 2010 and many other of the authors mentioned in Section 2, the investment variable is not constant, but is endogenized and used to model geographic coverage. We assume that µ D 2 is the fixed cost to serve a percentage D of the population.…”

Section: Investmentmentioning

confidence: 99%

“…In addition, we suppose in the remainder of this article that the marginal cost α f is negligible compared to the cost of infrastructure deployment (µ D 2 ), and we normalise it to zero (as in Avenali et al 2010). We assume also that the marginal cost for ADSL operators is equal to zero (α c = 0).…”

Section: Additional Assumptionsmentioning

confidence: 99%

“…For simplicity, as in Avenali et al [2010], Foros [2004], Kotakorpi [2006], in this section we only consider marginal costs.…”

Section: Cost-oriented Regulation ("Regulation 1")mentioning

confidence: 99%

See 3 more Smart Citations

Access regulation and geographic deployment of a new generation infrastructure

Flacher¹,

Jennequin²

2014

Telecommunications Policy

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Section: Related Literature 4 Related Literaturementioning

confidence: 99%

Section: Investmentmentioning

confidence: 99%

Section: Additional Assumptionsmentioning

confidence: 99%

“…For simplicity, as in Avenali et al [2010], Foros [2004], Kotakorpi [2006], in this section we only consider marginal costs.…”

Section: Cost-oriented Regulation ("Regulation 1")mentioning

confidence: 99%

See 2 more Smart Citations

Access regulation and geographic deployment of a new generation infrastructure

Flacher¹,

Jennequin²

2014

Telecommunications Policy

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“…We show that even in this case, the stepping stone e¤ect can contribute to delaying the entrant's investment. Avenali et al (2010) also study a setting where an entrant can acquire experience under servicebased competition. 5 Experience transforms into a (perceived) high quality only if the entrant invests in its own facilities.…”

mentioning

confidence: 99%

Progressive entry and the incentives to invest in alternative infrastructures

Drouard

2014

J Regul Econ

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In this paper we study an entrant's incentives to build a network infrastructure, when there is an initial phase of service-based competition where it leases access to the incumbent's infrastructure. We build a model in which the phase of service-based competition allows the entrant to step into the market by progressively acquiring market experience. We show that the acquisition of experience in the phase of service-based competition delays the entrant's investment when the prospects for infrastructure investment are good, and accelerates investment otherwise. We also show that when the acquisition of experience depends on the entrant's current customer base and facility-based entry is a long-term possibility, setting a low access price can accelerate the entrant's investment.

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Access Prices Indexed to Geographical Coverage of Innovative Telecom Services

Henriques

2020

J Ind Compet Trade

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The literature on access prices and investment has suggested that firms under-invest when subject to an access provision obligation combined with a fixed access price per consumer. In this paper, I study an access price per consumer for an innovative service such as superfast broadband provided by a regulated firm that is a function of its geographical coverage (indexation approach). The indexation approach can enhance economic efficiency beyond what is achieved with a fixed access price under a set of standard assumptions. In particular, it can simultaneously induce the firms to set lower retail prices, lead to wider geographical coverage of innovative services and higher social welfare level compared with a fixed access price. Moreover, in the model, the indexation may be used to achieve approximately the Ramsey outcome, or the first-best coverage level. I address how a regulator can set the access price indexation optimally, based on the coverage cost plus an incentive. I highlight the potential role of indexation as a tool to reduce the need for public subsidies and the associated tax distortions when compared with a fixed access price.

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Dynamic access pricing and investment in alternative infrastructures

Cited by 54 publications

References 25 publications

Access regulation and geographic deployment of a new generation infrastructure

Access regulation and geographic deployment of a new generation infrastructure

Progressive entry and the incentives to invest in alternative infrastructures

Access Prices Indexed to Geographical Coverage of Innovative Telecom Services

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