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Broadband and Unbundling Regulations in OECD Countries

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  • Wallsten, Scott
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    Abstract

    Broadband penetration and available speeds vary widely across OECD countries. Policymakers around the world, and especially in countries like the U.S. that lag in the rankings, are searching for policies to narrow those gaps. Relatively little empirical work tests possible reasons for these differences. In this paper I test the impacts of regulations and demographics on broadband development in a panel dataset across countries. In addition to adding to the meager empirical literature on broadband across countries, this paper is novel in two ways. First, it explicitly takes into account the many different types of unbundling regulations that countries have implemented. Second, in addition to studying the impacts of policies on broadband penetration, it also studies the impact of policies on available connection speeds. Controlling for country and year fixed effects, I find that local loop unbundling has no robustly significant impact on broadband penetration. More extensive "subloop" unbundling, however, is negatively correlated with penetration. Requiring the incumbent to allow on-site collocation is positively correlated with penetration, though regulating collocation charges is negatively correlated with penetration. None of the unbundling regulations are correlated with connection speeds, though regulated collocation prices are generally negatively correlated with speed. In sum, it appears that very extensive unbundling mandates and some types of price regulation can reduce broadband investment incentives, though regulations ensuring easier interconnection with the incumbent can increase investment.

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    Bibliographic Info

    Paper provided by Regulation2point0 in its series Working paper with number 314.

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    Date of creation: Jun 2006
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    Handle: RePEc:reg:wpaper:314

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    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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    1. Walter Distaso & Paolo Lupi & Fabio M. Manenti, 2005. "Platform Competition and Broadband Uptake: Theory and Empirical Evidence from the European Union," Industrial Organization 0504019, EconWPA.
    2. Flamm, Kenneth & Chaudhuri, Anindya, 0. "An analysis of the determinants of broadband access," Telecommunications Policy, Elsevier, vol. 31(6-7), pages 312-326, July.
    3. Crandall, Robert W. & Hahn, Robert W. & Litan, Robert E. & Wallsten, Scott, 2004. "Bandwidth for the People," Working paper 104, Regulation2point0.
    4. Mario Denni & Harald Gruber, 2006. "The diffusion of broadband telecommunications: the role of competition," Departmental Working Papers of Economics - University 'Roma Tre' 0060, Department of Economics - University Roma Tre.
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    Cited by:
    1. Thomas Kiessl & Hans Schedl, 2006. "The Telecommunication Markets in Selected OECD Countries: Market Characteristics and Regulatory Institutions," CESifo DICE Report, Ifo Institute for Economic Research at the University of Munich, vol. 4(3), pages 29-38, October.
    2. Paul de Bijl & Martin Peitz, 2006. "Broadband Access in Europe: Challenges for Policy and Regulation," CESifo DICE Report, Ifo Institute for Economic Research at the University of Munich, vol. 4(3), pages 10-15, October.
    3. Nicholas Economides & V. Brian Viard, 2010. "The Effect of Content on Global Internet Adoption and the Global “Digital Divide”," Working Papers 10-24, NET Institute, revised Sep 2013.
    4. Montolio, Daniel & Trillas, Francesc, 2013. "Regulatory federalism and industrial policy in broadband telecommunications," Information Economics and Policy, Elsevier, vol. 25(1), pages 18-31.
    5. Jean-Philippe Bonardi & Santiago Urbiztondo & Bertrand V. Quelin, 2009. "The political economy of international regulatory convergence in public utilities," International Journal of Management and Network Economics, Inderscience Enterprises Ltd, vol. 1(2), pages 232-256.
    6. Fageda, Xavier & Rubio-Campillo, Rafael & Termes-Rifé, Montserrat, 2014. "Determinants of broadband access: Is platform competition always the key variable to success?," Information Economics and Policy, Elsevier, vol. 26(C), pages 58-67.
    7. Viktória Kocsis & Paul Bijl, 2007. "Network neutrality and the nature of competition between network operators," International Economics and Economic Policy, Springer, vol. 4(2), pages 159-184, August.

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