Infrastructure Competition and Strategic Choice in the Transition to Next Generation Broadband Networks

23 Pages Posted: 31 Mar 2016 Last revised: 15 Aug 2016

See all articles by Reza Rajabiun

Reza Rajabiun

Ryerson University

Catherine A. Middleton

Ryerson University - Ted Rogers School of Management

Date Written: March 31, 2016

Abstract

This paper investigates how competition among operators of broadband access networks has shaped their strategic choices about deploying advanced broadband technologies and increasing network capacity. Focusing on the experience with operators in U.S. and Canada, the paper provides a firm level analysis of a variety of financial, organizational, and marketing choices influencing the extent to which particular operators have responded to rapidly growing demand for network resources since the late 2000s. Incentives of dominant operators in Canada have been relatively stronger than their counterparts in the U.S. to increase the capacity of legacy copper and cable platforms, while some U.S. operators have had stronger incentives to deploy next generation fibre-to-the-premises (FTTP) networks. A high dividend payout financial strategy and increasing vertical integration reduce incentives to invest in new technologies, while creating the potential for overinvestment and inefficient duplication in legacy platforms. We assess the implications of the experience in U.S. and Canada with infrastructure competition in the context of broader international search for private and public sector strategies that enhance the pace of progress in the transition from sunset to next generation broadband networks.

Keywords: Broadband, innovation, creative destruction, strategy, technological change

JEL Classification: K2, O3, L13, L86

Suggested Citation

Rajabiun, Reza and Middleton, Catherine A., Infrastructure Competition and Strategic Choice in the Transition to Next Generation Broadband Networks (March 31, 2016). Available at SSRN: https://ssrn.com/abstract=2757243

Reza Rajabiun (Contact Author)

Ryerson University ( email )

Ryerson University, 350 Victoria Street, Toronto
Toronto, Ontario M5B 2K3
Canada

Catherine A. Middleton

Ryerson University - Ted Rogers School of Management ( email )

350 Victoria Street
Toronto, Ontario M5B 2K3
Canada

HOME PAGE: http://www.broadbandresearch.ca

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