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Fiber investment and access under uncertainty: long-term contracts, risk premia, and access options

Author

Listed:
  • Marc Bourreau

    (SES - Département Sciences Economiques et Sociales - Télécom Paris - IMT - Institut Mines-Télécom [Paris] - IP Paris - Institut Polytechnique de Paris, ECOGE - Economie Gestion - I3 SES - Institut interdisciplinaire de l’innovation de Telecom Paris - Télécom Paris - IMT - Institut Mines-Télécom [Paris] - IP Paris - Institut Polytechnique de Paris - I3 - Institut interdisciplinaire de l’innovation - CNRS - Centre National de la Recherche Scientifique)

  • Carlo Cambini

    (Polito - Politecnico di Torino = Polytechnic of Turin)

  • Steffen Hoernig
  • Ingo Vogelsang

Abstract

Regulated access schemes shape incentives for both investment and entry in next-generation networks. We study in a general duopoly setting whether and how risk premia, access options or long-term contracts improve those incentives as compared to standard access pricing. The first two do so: Risk premia guarantee highest coverage, while distorting retail pricing. Access options safeguard undistorted retail competition, but are not effective in the most costly areas. On the other hand, long-term contracts have little scope to increase coverage because they intensify retail competition.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Marc Bourreau & Carlo Cambini & Steffen Hoernig & Ingo Vogelsang, 2020. "Fiber investment and access under uncertainty: long-term contracts, risk premia, and access options," Post-Print hal-02516745, HAL.
    • Handle: RePEc:hal:journl:hal-02516745
    DOI: 10.1007/s11149-020-09402-3
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    References listed on IDEAS

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    1. Nitsche, Rainer & Wiethaus, Lars, 2011. "Access regulation and investment in next generation networks -- A ranking of regulatory regimes," International Journal of Industrial Organization, Elsevier, vol. 29(2), pages 263-272, March.
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    8. Bourreau, Marc & Cambini, Carlo & Hoernig, Steffen & Vogelsang, Ingo, 2021. "Co-investment, uncertainty, and opportunism:ex-Ante and ex-Post remedies," Information Economics and Policy, Elsevier, vol. 56(C).
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    14. Bourreau, Marc & Cambini, Carlo & Hoernig, Steffen, 2018. "Cooperative investment, access, and uncertainty," International Journal of Industrial Organization, Elsevier, vol. 56(C), pages 78-106.
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    1. Bourreau, Marc & Cambini, Carlo & Hoernig, Steffen & Vogelsang, Ingo, 2021. "Co-investment, uncertainty, and opportunism:ex-Ante and ex-Post remedies," Information Economics and Policy, Elsevier, vol. 56(C).

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    More about this item

    JEL classification:

    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications

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