Incentive Regulation, Investments and Technological Change
43 Pages Posted: 3 Mar 2010
Date Written: February 2010
Abstract
Based on an idiosyncratic reading of the literature I propose intermediate (rather than tight or soft) regulation for balancing investment incentives with allocative efficiency and competition objectives. Intermediate regulation is compatible with incentive regulation and helps lengthening the regulatory commitment period necessary for incentives. However, such commitment for the whole time horizon of infrastructure or innovation investments is impossible. The compatibility of incentive regulation and efficient investment is thus in doubt. Incentive regulation for regular infrastructure investments therefore needs periodic updating based on rate-of-return regulation criteria. Innovative infrastructure investments may warrant regulatory holidays, which should be conditioned on strict criteria.
JEL Classification: L50, L90
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
'Build or Buy' Strategies in the Local Loop
By Pinar Dogan and Marc Bourreau
-
Unbundling and Incumbent Investment in Quality Upgrades and Cost Reduction
By João Vareda
-
Access Regulation and Investment in Next Generation Networks: A Ranking of Regulatory Regimes
By Rainer Nitsche and Lars Wiethaus
-
By João Vareda and Steffen Hoernig
-
By João Vareda and Steffen Hoernig
-
Incentives to Invest and to Give Access to Non-Regulated Next Generation Networks
By Duarte Brito, Pedro Pereira, ...
-
Investment in Next Generation Networks and the Role of Regulation: A Real Option Approach
By Andrea Gavosto, Guido Giacomo Ponte, ...
-
NGA, IP-Interconnection and Their Impact on Business Models and Competition
By Wolfgang Reichl and Ernst-olav Ruhle
-
Role of Access Charges in the Migration from Copper to FTTH
By François Jeanjean and Julienne Liang
-
Ex-Ante Regulation and Co-Investment in the Transition to Next Generation Access
By Marc Bourreau, Carlo Cambini, ...