European Sector Regulation and Investment Incentives for Broadband Communication Networks

34 Pages Posted: 10 Jul 2012

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Date Written: August 15, 2007

Abstract

This paper looks at the broadband telecommunications sector to unravel the relationships between sector regulation and investment behaviour in the European Union. Cost based access pricing regimes, although successful in attracting new entrants, have negatively affected the investment in fixed line infrastructure. New entrants show a low propensity to invest in infrastructure and there is an undue emphasis on a single technological platform. These facts may be compared with the mobile telecommunications sector. There access regulation is much less intrusive, because facility based competition induced a much higher degree of competition, while investment levels have decreased much less and the relative shares of investments by incumbents and new entrants are much more aligned with market shares. In order to restore incentives for investment in the view of expanding broadband access, a review of certain access regulation provisions seems to be necessary, possibly by providing greater incentives to facility based entry via platform competition.

Suggested Citation

Gruber, Harald, European Sector Regulation and Investment Incentives for Broadband Communication Networks (August 15, 2007). TPRC 2007. Available at SSRN: https://ssrn.com/abstract=2102821

Harald Gruber (Contact Author)

European Investment Bank ( email )

Projects Directorate 100 Boulevard Adenauer
L-2950
Luxembourg
+352 43798606 (Phone)
+352 43798831 (Fax)

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