This paper compares the impacts of traditional one-way access obligations and the new regulatory scheme of co-investment on the roll-out of network infrastructures. We show that compulsory access leads to smaller roll-out, first because it reduces the returns from investment, and second because in the presence of uncertainty it provides access seekers with an option whose exercise hurts investors. Co-investment without access obligations leads to risk sharing and eliminates the access option, implying highest network coverage. Allowing for access on top of co-investment actually decreases welfare if the access price is low.

Original languageEnglish
Pages (from-to)78-106
Number of pages29
JournalInternational Journal of Industrial Organization
Volume56
DOIs
StatePublished - 1 Jan 2018

    Research areas

  • Access obligations, Co-investment, Next generation networks, Uncertainty

ID: 3400786