Cooperative investment, access, and uncertainty
Title: Cooperative investment, access, and uncertainty
Series/Number: EUI RSCAS; 2016/61; Florence School of Regulation
External link: http://fsr.eui.eu
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.
Subject: Co-investment; Access obligations; Next generation networks; Uncertainty; L96; L51
Type of Access: openAccess