My Fibre or Your Fibre? Cooperative Investment, Uncertainty and Access
38 Pages Posted: 13 Jan 2013
Date Written: January 11, 2013
Abstract
We investigate cooperative investment in a new infrastructure and how it interacts with access obligations and demand uncertainty. Co-investment only increases total coverage if service differentiation and/or cost savings from joint investment, in particular due to high uncertainty, are high. Mandated access reduces incentives for co-investment not only through lower returns but also by creating the option to ask for access instead. Voluntary access provision increases infrastructure coverage but reduces social welfare by softening competition.
Keywords: Networks, Co-investment, Uncertainty, Access Obligations
JEL Classification: D21, D43, G31, L5, L92
Suggested Citation: Suggested Citation