A critical review of the “ladder of investment” approach

A critical review of the “ladder of investment” approach The “ladder of investment” is a regulatory approach proposed by Cave (2006) , which has been widely embraced by national regulatory authorities in the European telecommunications sector. The approach entails providing entrants, successively, with different levels of access—the “rungs” of the investment ladder, while inducing them to climb the ladder by setting an access charge that increases over time or by withdrawing access obligations after some pre-determined date (i.e., by setting sunset clauses). Proponents of the ladder of investment approach claim that such regulatory measures would make service-based entry and facility-based entry complements—albeit they have been traditionally viewed as substitutes—in promoting competition. The regulators, thus, have shown a strong interest in this approach. The paper provides a critical review of the ladder of investment approach by setting out its two underlying assumptions and discussing their validity with references to the related industrial organization literature. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Telecommunications Policy Elsevier

A critical review of the “ladder of investment” approach

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Publisher
Elsevier
Copyright
Copyright © 2010 Elsevier Ltd
ISSN
0308-5961
eISSN
1879-3258
D.O.I.
10.1016/j.telpol.2010.09.002
Publisher site
See Article on Publisher Site

Abstract

The “ladder of investment” is a regulatory approach proposed by Cave (2006) , which has been widely embraced by national regulatory authorities in the European telecommunications sector. The approach entails providing entrants, successively, with different levels of access—the “rungs” of the investment ladder, while inducing them to climb the ladder by setting an access charge that increases over time or by withdrawing access obligations after some pre-determined date (i.e., by setting sunset clauses). Proponents of the ladder of investment approach claim that such regulatory measures would make service-based entry and facility-based entry complements—albeit they have been traditionally viewed as substitutes—in promoting competition. The regulators, thus, have shown a strong interest in this approach. The paper provides a critical review of the ladder of investment approach by setting out its two underlying assumptions and discussing their validity with references to the related industrial organization literature.

Journal

Telecommunications PolicyElsevier

Published: Dec 1, 2010

References

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