Bourreau, Marc, Carlo Cambini, and Pinar Dogan. "Access Pricing, Competition, and Incentives to Migrate From "Old" to "New" Technology." HKS Faculty Research Working Paper Series RWP11-029, July 2011.

Abstract

In this paper, we analyze the incentives of an incumbent and an entrant to migrate from an "old" technology to a "new" technology, and discuss how the terms of wholesale access affect this migration. We show that a higher access charge on the legacy network pushes the entrant firm to invest more, but has an ambiguous effect on the incumbent's investments, due to two conflicting effects: the wholesale revenue effect, and the business migration effect. If both the old and the new infrastructures are subject to ex-ante access regulation, we also find that the two access charges are positively correlated.