Abstract
Entry, Investment and Competition In Telecommunications and Media Markets
Highlights
The continuous investment of alternative operators in telecommunications infrastructure in the years after liberalisation has led to increasingly differing competitive conditions across geographic areas
The cases of exclusions are reduced as to make entry of the competitor viable even if it is less efficient than the incumbent. This is due to the trade-off that if it would not allow the entrant on the NGN it would continue to compete for basic services over the legacy network at regulated marginal cost access prices, which is creating an opportunity cost for the incumbent
In case of deregulation of NGN the authors find that the better the competitor is on the fibre market the earlier the incumbent would invest as here the incumbent can always capture part of the rent of the competitor
Summary
The continuous investment of alternative operators in telecommunications infrastructure in the years after liberalisation has led to increasingly differing competitive conditions across geographic areas This is the case in those network segments where alternative operators have invested; in national and regional backbone segments and increasingly in local access directly connecting households in urban areas with generation broadband. The latter investment may be seen as valuable as high speed broadband has substantial positive spill-overs for the economy (Bourreau, Cambini and Hoernig (2012a) review relevant literature and estimates). The regulatory options a regulator has to implement this may range from regional full deregulation to access only obligations or forms of price regulation and will be reviewed in chapter 2 as well as their effects on competition, investment and welfare
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