Role of Access Charges in the Migration from Copper to FTTH

41 Pages Posted: 2 May 2011 Last revised: 21 Nov 2011

Multiple version iconThere are 2 versions of this paper

Date Written: May 2, 2011

Abstract

We consider a horizontally and vertically differentiated duopoly model in order to analyze both intra- and inter-platform competition in an always covered broadband access market (Copper-Copper, Copper-FTTH and FTTH-FTTH competitions). The model is purely static and does not address dynamic efficiency issues. It shows that the access charges play a significant role in the migration from copper to FTTH and in FTTH investment incentives, provided that consumers are segmented. In FTTH-infrastructure-based competition, investment incentives tend to increase with the copper access charge, while in FTTH-service-based competition, FTTH investment incentives are much more sensitive to the FTTH access charge than to the copper access charge. A comparison of FTTH-infrastructure-based and FTTH-service-based competition in terms of nationwide FTTH coverage and social welfare indicates that FTTH-infrastructure-based competition leads to a higher level of nationwide FTTH coverage and social welfare.

Keywords: Access Charge, FTTH, Investment, Regulation, Intra and Inter Platform Competition

JEL Classification: L51, L96

Suggested Citation

Jeanjean, François and Liang, Julienne, Role of Access Charges in the Migration from Copper to FTTH (May 2, 2011). Available at SSRN: https://ssrn.com/abstract=1829453 or http://dx.doi.org/10.2139/ssrn.1829453

François Jeanjean

Orange ( email )

6, place d'Alleray
Paris, 75015
France

Julienne Liang (Contact Author)

France Telecom ( email )

France

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