EditorialSymposium on access pricing investment and entry☆
Introduction
In September 2000, Onafhankelijke Post en Telecommunicatie Autoriteit (OPTA) and the Director General of Posts and Telecommunications of the Netherlands’ Government selected the authors of this set of papers to undertake a project analysing the relationship between investment behaviour and regulation in the telecommunications sector. The main aim of the project was to investigate the relationship between the regulation of access and incentives on the part of operators in the Dutch market (both KPN and entrants) to undertake investments in infrastructure—in other words, the key issue is the relationship between competition among service providers using principally the incumbent's infrastructure and competition among infrastructure operators and the influence of the regulators on these processes. The project had both positive and normative components. The former revolves around establishing the impact of different forms of regulation (especially of access) on the nature of the competitive process in telecommunications; the latter requires an evaluation of alternative possible outcomes, and hence the identification of a ‘best policy’. The proposal emphasised that the data would not support a rigorous and conclusive statistical analysis of the relationships between regulation and investment, and that the evaluation of alternative policies would inevitably rely heavily upon judgement.
It was agreed that the coverage of the project would be confined to fixed-link telecommunications network and services, on the basis that, to date, the level of competition between fixed and mobile was limited, with the consequence that the factual ‘record’ was confined to that situation. For the same reason, detailed consideration of new broadband delivery networks is omitted, although adaptation of existing networks to provide broadband services is considered.
The project was divided into a number of building blocks; it would be on the basis of these that conclusions were formed. This set of papers is structured in broadly the same way:
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Tommaso Valletti sets out the theoretical foundation of the analysis, first with respect to access pricing and secondly, to incentives to invest in infrastructure.
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Sumit Majumdar and colleagues present a statistical analysis of international evidence relating to the impact of access pricing and other regulatory variables on infrastructure investment, using both US state-level data and OECD data.
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Hendrick Rood and K.A. te Velde provide an analysis of the investment, market and related strategies of KPN and of key entrants into the Dutch market, chosen to reflect different approaches.
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Martin Cave and Ingo Vogelsang draw conclusions from the preceding sections in respect of the relationship between the regulation of access pricing and firms’ investment strategies, and develop the policy implications.
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Cited by (2)
The ladder of investment in Europe, in retrospect and prospect
2014, Telecommunications PolicyCitation Excerpt :As with many ‘discoveries’, the ladder of investment has a close anticipation in the idea, which flourished in the US, of stepping stones to infrastructure competition in telecommunications networks. But the progression from service to infrastructure competition was first identified by the present author in a study of the interaction between access pricing and investment carried out in 2000–2001 for the Netherlands Government and Opta, the Dutch telecommunications regulator (Symposium, 2003). Gradual progression by competitors from more to less reliance on the incumbent׳s inputs and, correspondingly, from less to more self-supplied infrastructure was identified both as a description of entrants׳ strategies (taking as an example entry by Tele-2 into the Dutch voice market) and as a possible regulatory strategy to promote infrastructure competition.
Lessons from the deregulation transition in Chile's local telephony market
2005, Telecommunications Policy
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Financial support for the work reported in this symposium was provided by the DG Post and Telecommunications of the Netherlands government and OPTA. Responsibility for its contents rests fully with the authors.