Investment and welfare implications of the ownership structure of overlapping networks

Duarte Brito, Pedro Pereira

Research output: Contribution to journalArticlepeer-review

1 Citation (Scopus)

Abstract

We analyze the impact of the ownership structure of cable television firms on the incentives to upgrade the cable networks to offer telecommunication services. First, we show that dual ownership of a local telephone network and a cable network, compared with separate ownership, may increase or decrease incentives to invest in upgrading the cable television network. Coordination economies benefit dual ownership, and business-stealing benefits separate ownership. Second, we perform a welfare analysis of the investment decision and third, a welfare analysis of the ownership structure.

Original languageEnglish
Pages (from-to)38-53
Number of pages16
JournalInformation Economics and Policy
Volume20
Issue number1
DOIs
Publication statusPublished - Mar 2008

Keywords

  • Cable networks
  • Competition
  • Local access

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