The Long-Run Effects of Copper Unbundling and the Implications for Fiber

Abstract

Policies mandating unbundling of copper telecommunications networks have now been in place for more than 15 years, and it is thus becoming possible to study their long-run effects. We review the existing evidence on the effects of copper unbundling, and present new empirical results based on our own regression analyses of broadband penetration in OECD countries from 2001 through 2010. We find that the long-run effect of copper unbundling on household broadband penetration rates is negative, a finding which is consistent with previous research. In this context, we assess the status of fiber to the premises (FTTP) networks. We conclude that copper unbundling has probably slowed the deployment of FTTP infrastructures, especially in Europe, and that proposals to mandate unbundling of fiber networks are likely to further deter FTTP deployment.