Competition Enhancing Regulation and Diffusion of Innovation: The Case of Broadband Networks

49 Pages Posted: 28 Jul 2011

See all articles by Harald Gruber

Harald Gruber

European Investment Bank

Pantelis Koutroumpis

Imperial College Business School; Columbia Institute for Tele-Information

Date Written: July 2011


The paper assesses the scope for competition inducing infrastructure regulation in furthering the diffusion of innovation. The paper uses data on the adoption of broadband services comprising a global panel of 167 countries. The effects of different regulatory provisions are assessed. Inter-firm competition in general and intra-platform competition on the incumbent’s DSL network in particular accelerate adoption of broadband, whereas there is little evidence that inter-platform over different access technologies and intra-platform competition on cable have such effects. Retail competition has about a twice as strong effect than local loop unbundling in furthering diffusion. The effect deriving from service competition is more powerful than the effect of provisions that induce competitors in investing. The diffusion enhancing effect from regulatory access provisions however dissipates after 3-4 years. These results are robust under different hypotheses of reverse causality and taking into account regulatory metrics and variable endogeneity.

Keywords: Broadband, regulation, innovation, service competition, platform competition, local loop unbundling

JEL Classification: L96, L51, O33

Suggested Citation

Gruber, Harald and Koutroumpis, Pantelis, Competition Enhancing Regulation and Diffusion of Innovation: The Case of Broadband Networks (July 2011). Available at SSRN: or

Harald Gruber (Contact Author)

European Investment Bank ( email )

Projects Directorate 100 Boulevard Adenauer
+352 43798606 (Phone)
+352 43798831 (Fax)

Pantelis Koutroumpis

Imperial College Business School ( email )

South Kensington Campus
Exhibition Road
London SW7 2AZ, SW7 2AZ
United Kingdom

Columbia Institute for Tele-Information ( email )

3022 Broadway
New York, NY 10027
United States

Register to save articles to
your library


Paper statistics

Abstract Views
PlumX Metrics