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To Regulate Or Not to Regulate? – Economic Approach to Indefeasible Right of Use (IRU)

Author

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  • Olender-Skorek, Magdalena

Abstract

The aim of this paper is to present an Indefeasible Right of Use (IRU) as a possible remedy for telecom infrastructure EU projects that (in Poland) have been lagged behind the time. Thanks for IRU, Beneficiaries of these EU projects will be able to save both: time and money and will finish projects successfully. The author discusses two possible methods of implementing IRU: via regulatory obligation and via incumbent’s goodwill. The author proposes a game theory model with payoffs depending on regulator’s and incumbent’s strategies. Using a game theory tree, the author shows that if only the incumbent is willing to offer his own network, IRU may be signed and most delays in EU projects disappear. The success is not so obvious while implementing IRU as an obligation – in this case EU projects will probably fail.

Suggested Citation

  • Olender-Skorek, Magdalena, 2012. "To Regulate Or Not to Regulate? – Economic Approach to Indefeasible Right of Use (IRU)," MPRA Paper 48548, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:48548
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    File URL: https://mpra.ub.uni-muenchen.de/48548/1/MPRA_paper_48548.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Indefeasible Right of Use (IRU); long-term agreement; third party access; telecom market; entry barriers; infrastructure owner; entrants; infrastructure; EU projects;
    All these keywords.

    JEL classification:

    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law

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