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Strategic investments with spillovers, vertical integration and foreclosure in the broadband access market

Foros, Øystein
Working paper
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dp2002-13.pdf (99.46Kb)
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http://hdl.handle.net/11250/162936
Utgivelsesdato
2002-06
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  • Discussion papers (SAM) [579]
Sammendrag
We analyse competition between two firms (ISPs) in the retail market for broadband access. One of the firms is

vertically integrated and controls the input market for local access. The vertically integrated firm undertakes an

investment that increases the quality of the input (upgrading to broadband). The retailers’ ability to offer valueadded

services when the input quality is improved differs. We analyse the effect of an access price regulation

that is set after the investment. The access price regulation may have negative effects on investment incentives,

and we show that the total effect on consumer surplus and welfare depends on which firm has the highest ability to offer value-added services.
Utgiver
Norwegian School of Economics and Business Administration. Department of Economics
Serie
Discussion paper
2002:13

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