The impact of regulation and competition on the adoption of fiber-based broadband services: recent evidence from the European union member states
- 827 Downloads
Fiber deployment of next-generation high-speed broadband networks is considered to be a decisive development for any information-based society, yet investment activities and especially the adoption of fiber-based broadband services take place only very gradually in most countries. This work employs static and dynamic model specifications and identifies the most important determinants of the adoption of fiber-based broadband services with recent panel data from the European Union member states for the years from 2004 to 2012. The results show that the more effective previous broadband access regulation is, the more negative the impact on adoption, while competitive pressure from mobile networks affects adoption in a non-linear manner. Finally, we also find evidence for substantial network effects underlying the adoption process.
KeywordsNext generation communications networks Regulation Competition Fiber adoption
JELH5 L38 L43 L52
The author is grateful to two anonymous referees as well as to Klaus Gugler and Georg Ecker for their helpful comments. Furthermore, the author is grateful for the suggestions of the participants at the 2nd Conference on the Regulation of Infrastructure Industries at the EUI in Florence and the 24th European Regional Conference of the International Telecommunications Society in Florence.
- Aghion, P., Bloom, N., Blundell, R., Griffith, R., & Howitt, P. (2005). Competition and innovation: An inverted-U relationship. Quarterly Journal of Economics, 120, 701–728.Google Scholar
- Arrow, K. J. (1962). Economic welfare and the allocation of resources to invention. In R. R. Nelson (Ed.), The rate and direction of economic activity. New York: Princeton University Press.Google Scholar
- Bacache, M., Bourreau, M., & Gaudin, G. (2012). Dynamic entry and investment in new infrastructures: Empirical evidence from the telecoms industry. Working paper. Paris: Telecom ParisTech.Google Scholar
- Berkman Center (2010). Next generation connectivity: A review of broadband Internet transitions and policy from around the world. Final report. http://cyber.law.harvard.edu/pubrelease/broadband/. Accessed 28 Oct 2013.
- Bond, S. (2002). Dynamic panel data models: A guide to micro data methods and practice. Working paper, centre for microdata methods and, practice, CWP09/02.Google Scholar
- Briglauer, W., & Gugler, K. (2013). The deployment and penetration of high-speed fiber networks and services: Why are European member states lagging behind? Telecommunications Policy, 37, 819–835.Google Scholar
- Bruno, G. (2005b). Estimation and inference in dynamic unbalanced panel-data models with a small number of individuals. The Stata Journal, 5, 473–500.Google Scholar
- Cullen International (2011). Cross-country analysis April 2010. Brussels.Google Scholar
- Denni, M., & Gruber, H. (2007). The diffusion of broadband telecommunications in the U.S. Communications and Strategies, 68, 139–157.Google Scholar
- European Commission. (2010a). A digital agenda for Europe. COM(2010) 245, Brussels.Google Scholar
- European Commission. (2010b). Commission recommendation of 20 September 2010 on regulated access to next generation access networks (NGA). (2010/572/EU), Brussels.Google Scholar
- European Commission. (2012). Digital agenda for Europe scoreboard 2012. June 2012, Brussels. https://ec.europa.eu/digital-agenda/sites/digital-agenda/files/KKAH12001ENN-PDFWEB_1.pdf. Accessed 28 Oct 2013.
- European Commission. (2013). Commission recommendation of 11.9.2013 on consistent non-discrimination obligations and costing methodologies to promote competition and enhance the broadband investment environment. C(2013) 5761, Brussels.Google Scholar
- FTTH Council Europe (2012). FTTH business guide (3rd ed.). Business Committee. www.ftthcouncil.eu. Accessed 28 Oct 2013.
- Guthrie, G. (2009). Real options in theory and practice. New York: Oxford University Press.Google Scholar
- Hoechle, D. (2007). Robust standard errors for panel regressions with cross-sectional dependence. The Stata Journal, 7, 281–312.Google Scholar
- RTR— Austrian Regulatory Authority for Broadcasting and Telecommunications. (2010). Communications report 2009, Vienna. http://www.rtr.at/de/komp/alleBerichte. Accessed 28 Oct 2013.
- Shy, Oz (2010). A short survey on network economics. Working paper no. 10–3. Boston: Federal Reserve Bank of Boston.Google Scholar
- Wallsten, S., & Hausladen, S. (2009). Net neutrality, unbundling, and their effects on international investment in next-generation networks. Review of Network Economics, 8, 90–112.Google Scholar
- wik consult. (2008). The Economics of Next Generation Networks. Report commissioned by ECTA, Bad Honnef.Google Scholar
- Wooldridge, J. (2002). Econometric analysis of cross section and panel data. Cambridge: MIT Press.Google Scholar
- Zenhäusern, P., Schneider, Y., Berner, S., & Vaterlaus, S. (2012). Manual for the ‘Polynomics Regulation Index 2012’ Data Set. Polynomics, Olten.Google Scholar