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Do market failures hamper the perspectives of broadband?

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  • Machiel van Dijk

    ()

  • Bert Minne
  • Machiel Mulder
  • Henry van der Wiel

    ()

  • J. Poort

Abstract

This report analyses the broadband market and asks whether a specific role of government is necessary. As broadband telecommunication is seen as a source of productivity gains, the European Union and other regions are encouraging the deployment of a secure broadband infrastructure. In the Netherlands, there is some concern whether the supply of broadband capacity will meet the strongly increasing demand. The main conclusions are that presently, given current broadband policy, no considerable market failures exist. Firms have adequate incentives to invest in broadband, partly induced by specific regulation of access to the local copper loop. Hence, there is no need for changes in current broadband policy. Market failures in terms of knowledge spillovers are taken care of by other policies. As the broadband markets are very dynamic, unforeseen developments may emerge such as the appearance of new dominant techniques and market players. The best strategy for the government, in particular the competition authority, is to continuously monitor these markets, making timely intervention easier when needed.

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Bibliographic Info

Paper provided by CPB Netherlands Bureau for Economic Policy Analysis in its series CPB Document with number 102.

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Date of creation: Dec 2005
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Handle: RePEc:cpb:docmnt:102

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  1. Rob Aalbers & Victoria Shestalova & Sander Onderstal, 2004. "Better safe than sorry? Reliability policy in network industries," CPB Document 73, CPB Netherlands Bureau for Economic Policy Analysis.
  2. James E. Prieger, 2003. "The Supply Side of the Digital Divide: Is There Equal Availability in the Broadband Internet Access Market?," Economic Inquiry, Western Economic Association International, vol. 41(2), pages 346-363, April.
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  7. Foros, Oystein & Kind, Hans Jarle, 2003. "The Broadband Access Market: Competition, Uniform Pricing and Geographical Coverage," Journal of Regulatory Economics, Springer, vol. 23(3), pages 215-35, May.
  8. Fink, Carsten & Mattoo, Aaditya & Rathindran, Randeep, 2002. "Liberalizing basic telecommunications : the Asian experience," HWWA Discussion Papers 163, Hamburg Institute of International Economics (HWWA).
  9. Canoy, M.F.M. & Bijl, P.W.J. de & Kemp, R., 2003. "Access to telecommunications networks," Discussion Paper 2003-007, Tilburg University, Tilburg Law and Economic Center.
  10. Henry van der Wiel & George van Leeuwen, 2003. "Do ICT spillovers matter; evidence from Dutch firm-level data," CPB Discussion Paper 26, CPB Netherlands Bureau for Economic Policy Analysis.
  11. Kenneth Arrow, 1962. "Economic Welfare and the Allocation of Resources for Invention," NBER Chapters, in: The Rate and Direction of Inventive Activity: Economic and Social Factors, pages 609-626 National Bureau of Economic Research, Inc.
  12. Paul de Bijl & Marcel Canoy & M. Bennett, 2001. "Future policy in telecommunications: an analytical framework," CPB Document 5, CPB Netherlands Bureau for Economic Policy Analysis.
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Cited by:
  1. Machiel van Dijk & Machiel Mulder, 2005. "Regulation of telecommunication and deployment of broadband," CPB Memorandum 131, CPB Netherlands Bureau for Economic Policy Analysis.

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