Cooperative Investment, Access, and Uncertainty

27 Pages Posted: 2 Nov 2016

See all articles by Marc Bourreau

Marc Bourreau

Telecom ParisTech

Carlo Cambini

Politecnico di Torino & EUI - Florence School of Regulation; European University Institute - Robert Schuman Centre for Advanced Studies (RSCAS)

Steffen Hoernig

Nova SBE, Universidade Nova de Lisboa

Multiple version iconThere are 2 versions of this paper

Date Written: October 18, 2016

Abstract

This paper compares the impacts of traditional one‒way access obligations and the new regulatory scheme of co-investment on the roll-out of network infrastructures. We show that compulsory access leads to smaller roll-out, first because it reduces the returns from investment, and second because in the presence of uncertainty it provides access seekers with an option whose exercise hurts investors. Co-investment without access obligations leads to risk sharing and eliminates the access option, implying highest network coverage. Allowing for access on top of co-investment actually decreases welfare if the access price is low.

Keywords: Co-Investment, Access Obligations, Next Generation Networks, Uncertainty

JEL Classification: L96, L51

Suggested Citation

Bourreau, Marc and Cambini, Carlo and Hoernig, Steffen, Cooperative Investment, Access, and Uncertainty (October 18, 2016). Available at SSRN: https://ssrn.com/abstract=2862511 or http://dx.doi.org/10.2139/ssrn.2862511

Marc Bourreau (Contact Author)

Telecom ParisTech ( email )

46, rue Barrault
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France

Carlo Cambini

Politecnico di Torino & EUI - Florence School of Regulation ( email )

Corso Duca degli Abruzzi, 24
Torino, Torino 10129
Italy
+390115647292 (Phone)
+390115647299 (Fax)

European University Institute - Robert Schuman Centre for Advanced Studies (RSCAS) ( email )

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50016 San Domenico di Fiesole
Florence, Florence 50014
Italy

Steffen Hoernig

Nova SBE, Universidade Nova de Lisboa ( email )

Campus De Carcavelos
Rua Da Holanda 1
Carcavelos, 2775-405
Portugal
+351-213801600 (Phone)

HOME PAGE: http://https://www2.novasbe.unl.pt/en/faculty-research/faculty/faculty-detail/id/46/steffen-hoernig

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