Level of Access and Competition in Broadband Markets

24 Pages Posted: 6 Mar 2010

See all articles by Marc Bourreau

Marc Bourreau

Telecom ParisTech

Pinar Dogan

Harvard University - Harvard Kennedy School (HKS)

Date Written: February 11, 2010

Abstract

In this paper, we consider an unregulated incumbent who owns a broadband infrastructure and decides on how much access to provide to a potential entrant. The level of access, i.e., the network elements that are shared in the provision of competing broadband services, not only determines the amount of investment the entrant needs to undertake to enter the market, but also the intensity of post-entry competition. We consider an access scheme that determines an access level and an associated two-part tariff. We show that the equilibrium level of access is higher when the sensitivity of product differentiation to the level of access is lower, and when the marginal investment cost is higher. We also show that the unregulated incumbent sets a suboptimally low (high) level of access if the degree of service differentiation is sufficiently high (low).

Keywords: Infrastructure Sharing, Access, Telecommunications

Suggested Citation

Bourreau, Marc and Dogan, Pinar, Level of Access and Competition in Broadband Markets (February 11, 2010). HKS Working Paper No. RWP10-006, Available at SSRN: https://ssrn.com/abstract=1565554 or http://dx.doi.org/10.2139/ssrn.1565554

Marc Bourreau (Contact Author)

Telecom ParisTech ( email )

46, rue Barrault
Paris Cedex 13, F-75634
France

Pinar Dogan

Harvard University - Harvard Kennedy School (HKS) ( email )

79 John F. Kennedy Street
Cambridge, MA 02138
United States
617-496-6757 (Phone)
617-496-5747 (Fax)

HOME PAGE: http://scholar.harvard.edu/pdogan/home

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