European Sector Regulation and Investment Incentives for Broadband Communication Networks

34 Pages Posted: 29 Mar 2007

Multiple version iconThere are 2 versions of this paper

Date Written: March 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 seem to be necessary, possibly by providing greater incentives to facility based entry via platform competition.

Keywords: Broadband, telecommunications, cable, investment, regulation, European Union

JEL Classification: L51, L96

Suggested Citation

Gruber, Harald, European Sector Regulation and Investment Incentives for Broadband Communication Networks (March 2007). Available at SSRN: https://ssrn.com/abstract=976887 or http://dx.doi.org/10.2139/ssrn.976887

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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