Level of Access and Competition in Broadband Markets

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Level of Access and Competition in Broadband Markets

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Title: Level of Access and Competition in Broadband Markets
Author: Bourreau, Marc; Dogan, Pinar

Note: Order does not necessarily reflect citation order of authors.

Citation: Bourreau, Marc, and Pinar Dogan. 2010. Level of Access and Competition in Broadband Markets. HKS Faculty Research Working Paper Series, RWP10-006, John F. Kennedy School of Government, Harvard University.
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Abstract: In this paper, we consider an unregulated incumbent who owns a broadband infrastructure and decides on how much access to provide to a potential entrant. The level of access, i.e., the network elements that are shared in the provision of competing broadband services, not only determines the amount of investment the entrant needs to undertake to enter the market, but also the intensity of post-entry competition. We consider an access scheme that determines an access level and an associated two-part tariff. We show that the equilibrium level of access is higher when the sensitivity of product differentiation to the level of access is lower, and when the marginal investment cost is higher. We also show that the unregulated incumbent sets a suboptimally low (high) level of access if the degree of service differentiation is sufficiently high (low).
Published Version: http://web.hks.harvard.edu/publications/workingpapers/citation.aspx?PubId=7105
Terms of Use: This article is made available under the terms and conditions applicable to Other Posted Material, as set forth at http://nrs.harvard.edu/urn-3:HUL.InstRepos:dash.current.terms-of-use#LAA
Citable link to this page: http://nrs.harvard.edu/urn-3:HUL.InstRepos:4454152
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