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Around the world, regulators since 1996 have mandated that incumbent local exchange carriers (ILECs) offer competitors access to their network at regulated prices that reflect forward-looking cost. Regulated prices for unbundled network elements are based on total element long-run incremental...
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the existing network to provide advanced services. We study the impact of access regulation on the type of entry and on … firms' investments. Without regulation, we find that the incumbent sets the access charge to prevent resale based entry and … this overstimulates rival's investment that may turn out to be socially inefficient. Access regulation may discourage …
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