The Role of Regulation in 5G Market Design

28 Pages Posted: 17 Jul 2019

See all articles by Johannes M. Bauer

Johannes M. Bauer

Michigan State University-Department of Media and Information

Erik Bohlin

Chalmers University of Technology

Date Written: July 15, 2019

Abstract

The emergence of new technologies forces policy makers to decide whether the existing legal and regulatory framework is appropriate or whether a different approach might better realize their potential benefits for society. While there is broad agreement on the desirability of competition in future 5G markets, national and regional models differ widely regarding the envisioned role of policy and regulation. This paper explores the rationales, strengths, and weaknesses of specific policies that are currently debated, including the regulation of backhaul services, network rollout targets, MVNO obligations, network neutrality rules, and open platform safeguards. It assesses the effects of these regulatory options on investment and innovation in a theoretical framework that considers the strong interdependencies and complementarities between players in the 5G value system explicitly. This reveals the presence of traditional forms of market failure and the possibility of new ones related to coordination requirements of advanced wireless technologies. The analysis suggests that multiple policy equilibria exist, each corresponding to a specific constellation of 5G policy, that are associated with different innovation and investment trajectories of the sector.

Keywords: 5G, regulation, complementary innovation, investment, market design, competition policy

JEL Classification: L51, L86, L96, O38

Suggested Citation

Bauer, Johannes M. and Bohlin, Erik, The Role of Regulation in 5G Market Design (July 15, 2019). Available at SSRN: https://ssrn.com/abstract=3421024 or http://dx.doi.org/10.2139/ssrn.3421024

Johannes M. Bauer (Contact Author)

Michigan State University-Department of Media and Information ( email )

409 Communication Arts Building
East Lansing, MI 48824-1212
United States
517-355-8372 (Phone)
517-355-1292 (Fax)

HOME PAGE: http://www.msu.edu/~bauerj

Erik Bohlin

Chalmers University of Technology ( email )

SE-412 96 Goteborg
Sweden

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