Efficient contracts for government intervention in promoting next generation communications networks

Briglauer, Wolfgang ; Holzleitner, Christian

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URL: https://ub-madoc.bib.uni-mannheim.de/36630
URN: urn:nbn:de:bsz:180-madoc-366306
Document Type: Working paper
Year of publication: 2014
The title of a journal, publication series: ZEW Discussion Papers
Volume: 14-022
Place of publication: Mannheim
Publication language: English
Institution: Sonstige Einrichtungen > ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
MADOC publication series: Veröffentlichungen des ZEW (Leibniz-Zentrum für Europäische Wirtschaftsforschung) > ZEW Discussion Papers
Subject: 330 Economics
Classification: JEL: H20 , L43 , L44 , L51 , L52 , L96,
Keywords (English): Contract theory , public utilities , next generation telecommunications networks , subsidies
Abstract: Although the future socio-economic benefits of a new fibre-based (“next generation access”, NGA) telecommunications infrastructure seem to be uncontroversial, a universal NGA coverage appears to be a rather unrealistic objective without government intervention. We contend, however, that the current contract practice of fixing ex ante targets for network expansion is inefficient given the uncertainty about future returns on NGA infrastructure-based services and the public authorities’ incomplete information about the capital costs of the network provider. This paper puts forward to delegate the choice of the network expansion to the NGA provider.

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