LEVEL OF ACCESS AND INVESTMENT IN TELECOMMUNICATIONS NETWORKS

In line with the ladder of investment approach and in contrast with the previous literature, we show that in the telecommunications sector, service-based entry can in some cases accelerate the development of facility-based competition. We extend the model introduced by Bourreau, Dogan and Lestage [2014], in which a regulator sets not only the access price but also the level of access to the infrastructure of the incumbent. When learning effects are factored in or when the level of access affects the differentiation possibilities, we show that service-based entry can accelerate facility-based competition.