TY - JOUR
T1 - Fiber investment and access under uncertainty
T2 - long-term contracts, risk premia, and access options
AU - Bourreau, Marc
AU - Cambini, Carlo
AU - Hoernig, Steffen
AU - Vogelsang, Ingo
PY - 2020/4
Y1 - 2020/4
N2 - 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.
AB - 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.
KW - Access options
KW - Long-term contracts
KW - Next generation networks
KW - Risk premium
KW - Uncertainty
UR - http://www.scopus.com/inward/record.url?scp=85081729506&partnerID=8YFLogxK
UR - https://link.springer.com/journal/11149/57/2
U2 - 10.1007/s11149-020-09402-3
DO - 10.1007/s11149-020-09402-3
M3 - Article
AN - SCOPUS:85081729506
SN - 0922-680X
VL - 57
SP - 105
EP - 117
JO - Journal Of Regulatory Economics
JF - Journal Of Regulatory Economics
IS - 2
ER -