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Distorted access regulation with strategic investments: Regulatory non-commitment and spillovers revisited

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  • Mizuno, Keizo
  • Yoshino, Ichiro

Abstract

We reexamine the properties of access regulation and an incumbent’s incentive for infrastructure investment under regulatory non-commitment and spillovers through access. The results show that when the degree of spillover is small, the incumbent’s strategic opportunity to invest in infrastructure distorts the access charge set by a regulator from a welfare perspective. In particular, when the degree of spillover is small and the incumbent’s investment cost is high (low), the incumbent has an incentive to utilize regulatory non-commitment to induce a high (low) access charge by overinvesting (underinvesting) in infrastructure.

Suggested Citation

  • Mizuno, Keizo & Yoshino, Ichiro, 2012. "Distorted access regulation with strategic investments: Regulatory non-commitment and spillovers revisited," Information Economics and Policy, Elsevier, vol. 24(2), pages 120-131.
    • Handle: RePEc:eee:iepoli:v:24:y:2012:i:2:p:120-131
    DOI: 10.1016/j.infoecopol.2012.02.003
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    Citations

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    Cited by:

    1. Keizo Mizuno & Ichiro Yoshino, 2015. "Overusing a bypass under cost-based access regulation: underinvestment with spillovers," Journal of Regulatory Economics, Springer, vol. 47(1), pages 29-57, February.
    2. Avenali, Alessandro & Matteucci, Giorgio & Reverberi, Pierfrancesco, 2014. "Broadband investment and welfare under functional and ownership separation," Information Economics and Policy, Elsevier, vol. 28(C), pages 70-82.
    3. Briglauer Wolfgang & Frübing Stefan & Vogelsang Ingo, 2014. "The Impact of Alternative Public Policies on the Deployment of New Communications Infrastructure – A Survey," Review of Network Economics, De Gruyter, vol. 13(3), pages 227-270, September.
    4. Tselekounis, Markos & Varoutas, Dimitris, 2013. "Investments in next generation access infrastructures under regulatory uncertainty," Telecommunications Policy, Elsevier, vol. 37(10), pages 879-892.
    5. Matsushima, Noriaki & Mizuno, Keizo, 2014. "Competition for access provision: Infrastructure upgrades with spillovers," 25th European Regional ITS Conference, Brussels 2014 101419, International Telecommunications Society (ITS).
    6. Zongo, Amara, 2020. "The Impact of Restrictive Measures on Bilateral FDI in OECD Countries," MPRA Paper 101929, University Library of Munich, Germany.
    7. Bourreau, Marc & Cambini, Carlo & Hoernig, Steffen, 2015. "Geographic access markets and investments," Information Economics and Policy, Elsevier, vol. 31(C), pages 13-21.
    8. Ribeiro, Vitor Miguel, 2016. "Exclusion and regulatory intervention in investment sharing agreements," Telecommunications Policy, Elsevier, vol. 40(10), pages 1032-1051.
    9. Cambini, Carlo & Silvestri, Virginia, 2012. "Technology investment and alternative regulatory regimes with demand uncertainty," Information Economics and Policy, Elsevier, vol. 24(3), pages 212-230.
    10. Noriaki Matsushima & Keizo Mizuno, 2012. "Infrastructure Upgrades and Foreclosure with Coexistence of Service-Based and Facility-Based Firms," ISER Discussion Paper 0860, Institute of Social and Economic Research, Osaka University.
    11. Ben Dkhil, Inès, 2014. "Regulation and Investment in Telecom Network Infrastructure Facilities: The Recent Developments and Debates," MPRA Paper 72910, University Library of Munich, Germany, revised 02 Feb 2015.
    12. Hoernig, Steffen & Cambini, Carlo, 2012. "Geographic Access Rules and Investments," CEPR Discussion Papers 9013, C.E.P.R. Discussion Papers.

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    More about this item

    Keywords

    Access charge; Regulatory non-commitment; Spillovers;
    All these keywords.

    JEL classification:

    • L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications

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