Book/Printed Material Mandatory unbundling and irreversible investment in telecom networks
About this Item
Title
- Mandatory unbundling and irreversible investment in telecom networks
Summary
- "This paper addresses the impact on investment incentives of the network sharing arrangements mandated by the Telecommunications Act of 1996, with a focus on the implications of irreversible investment. Although the goal is to promote competition, the sharing rules now in place reduce incentives to build new networks or upgrade existing ones. Such investments are irreversible %u2013 they involve sunk costs. The basic framework adopted by regulators allows entrants to utilize such facilities at prices reflecting what it would cost a new, efficient, large-scale network to be built. Such sharing opportunities are extensive, covering virtually the entire suite of network services provided, and extremely flexible, as the entrant can rent facilities in small increments for short duration, with no long-term contracts required. Because the entrant does not bear the sunk costs, this leads to an asymmetric allocation of risk and return that is not properly accounted for in the pricing of network services, which creates a significant investment disincentive"--National Bureau of Economic Research web site.
Names
- Pindyck, Robert S.
- National Bureau of Economic Research
Created / Published
- Cambridge, MA : National Bureau of Economic Research, c2004.
Headings
- - United States.--Telecommunications Act of 1996
- - Telecommunication--Deregulation--United States
Notes
- - Title from PDF file as viewed on 1/25/2005.
- - Includes bibliographical references.
- - Also available in print.
- - Mode of access: World Wide Web.
- - System requirements: Adobe Acrobat Reader.
Call Number/Physical Location
- HB1
Digital Id
- https://hdl.loc.gov/loc.gdc/gdcebookspublic.2005616227
- http://papers.nber.org/papers/W10287 External
Library of Congress Control Number
- 2005616227
Access Advisory
- Unrestricted online access
Online Format
- image