This paper compares the impact of retail price discrimination and uniform pricing on a monopolist’s incentives to extend its Next Generation Access (NGA) network deployment to less densely populated geographic areas. It is found that geographic price discrimination provides the monopolist with higher incentives to deploy a larger NGA network. In addition, geographic price discrimination results in better welfare outcomes than uniform pricing as long as the investment cost is not extremely low. In such cases, the regulator should allow the monopolist to geographically price discriminate since the monopolist chooses the socially optimal pricing regime.
