Role of access charges in the migration from copper to FTTH
by François Jeanjean; Julienne Liang
International Journal of Management and Network Economics (IJMNE), Vol. 2, No. 3, 2012

Abstract: We consider a horizontally and vertically differentiated duopoly model in order to analyse both intra- and inter-platform competition in a fully covered broadband access market (copper-copper, copper-FTTH and FTTH-FTTH competitions). The model is purely static and does not address dynamic efficiency issues. It shows that the copper access charge plays a significant role in the migration from copper to FTTH and in FTTH investment incentives provided that consumers are segmented according to the access network technologies. In FTTH-infrastructure-based competition, only one of the two operators has incentives to invest in FTTH in less dense areas. Rival's investment incentives react positively to the access charge level. However, the incumbent's investment incentives are far less sensitive to the access charge for the reason that the gain from FTTH advantage is negatively impacted by the revenue loss in the wholesale market. The more competitive the broadband market is, the higher an access charge is required in order to enhance the rival's FTTH coverage. A regulation of copper access charge above its cost level leads to a higher level of nationwide FTTH coverage and social welfare.

Online publication date: Sat, 30-Aug-2014

The full text of this article is only available to individual subscribers or to users at subscribing institutions.

 
Existing subscribers:
Go to Inderscience Online Journals to access the Full Text of this article.

Pay per view:
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.

Complimentary Subscribers, Editors or Members of the Editorial Board of the International Journal of Management and Network Economics (IJMNE):
Login with your Inderscience username and password:

Username:        Password:          Forgotten your password?

Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.

If you still need assistance, please email subs@inderscience.com