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BROADBAND INVESTMENT AND REGULATION

La tesi è strutturata in 3 capitoli e analizza gli investimenti e la regolamentazione nel broadband market".
Il primo capitolo analizza la letteratura teorica ed empirica sul rapporto tra gli investimenti e la regolamentazione nel settore delle telecomunicazioni. Il secondo capitolo fornisce un'analisi teorica sullo "stepping-stone theory". La terza parte fornisce un'analisi sull'impatto dei diversi regimi normativi per la costruzione della Next Generation Networks. / This dissertation is composed of three papers and discusses the issue of investment and regulation in broadband market.
The first paper reviews the specialized but growing branch of the literature. It surveys the relevant theoretical and empirical literature on the relationship between regulation, at both retail and wholesale level, and investment in telecoms infrastructures. Theoretical analyses state that with respect to retail (incentive) regulation, the firm‘s incentive to invest is related to the level of price cap. As for access regulation, mandatory unbundling can possibly discourage firms‘ incentive to invest, but this is not the case for all circumstances because some studies have displayed an opposite (positive) effect on investment. The influence of regulators‘ limited ability to make credible commitment ex ante is not negligible either. Evidence in empirical findings exhibits a certain disunity. The majority concludes that local loop unbundling based on forward-looking cost methodology discourages both ILECs and CLECs from investing in networks, so that the stepping-stone theory is possibly not supported by the data; other findings support the non-negative effect of access regulation on investment.
The second paper provides theoretical analysis on the stepping-stone theory. We dynamically model the competition between a vertically-integrated incumbent firm and a facilities-free new entrant in broadband market, where both firms are entitled with investment options: not only can the incumbent decide how much to spend in upgrading its existing network, but also the entrant can choose whether and when to invest on the construction of its own network. The analysis is conducted under three different kinds of competition: pure services-based, pure facilities-based and mixed competition. We find that the entrant's ability to provide value-added services affects the incumbent's investment choice. Our simulation results support the stepping-stone theory that access regulation provides an impetus for the entrant to invest in their own facilities after entering the market based on leased lines. It is also socially desirable because both the overall welfare and the consumer surplus are maximized in a regulated market under mixed competition.
The third paper studies impacts of different regulatory regimes on the construction of Next Generation Networks (NGNs). We model the competition between a vertically-integrated incumbent firm and a facilities-free entrant firm in broadband market, where the incumbent has an investment option to upgrade its current network to the NGN. In order to analyze how policy settings affect the incumbent firm‘s investment choice, three kinds of regulatory regimes are discussed: no regulation, partial regulation (only the traditional network is regulated and the NGN is unregulated) and full regulation (both the traditional network and the NGN are regulated). We find that not only the entrant‘s ability to provide value-added services, but also the substitution factor that indexes the decrease in consumers‘ willingness to pay for the traditional service once the investment occurs, affect the incumbent‘s investment choice. Moreover, the comparison of results under different regimes shows that the incumbent invests the most under partial regulation, which sheds some light on impelling the deployment of Next Generation Networks.

Identiferoai:union.ndltd.org:DocTA/oai:tesionline.unicatt.it:10280/693
Date10 March 2010
CreatorsJIANG, YANYAN
ContributorsBORDIGNON, MASSIMO, CAMBINI, CARLO
PublisherUniversità Cattolica del Sacro Cuore, MILANO
Source SetsUniversita Cattolica del Sacro Cuore. DocTA
LanguageEnglish
Detected LanguageEnglish
TypeDoctoral Thesis
FormatAdobe PDF
Rightsreserved

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