IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this article

Using the economics of platforms to understand the broadband-based market formation in the New Zealand Ultra-Fast Broadband Network

Listed author(s):
  • Beltrán, Fernando
Registered author(s):

    The government of New Zealand is currently building a nation-wide fibre-optics network, a project known as the Ultra-Fast Broadband (UFB) initiative. The UFB network will cover 75 percent of New Zealanders over 10 years and will cost NZD $1.5 billion to the New Zealand government. The technical and economic characteristics of the new network will have a deep impact on the current landscape of the telecommunications markets. Institutional arrangements are in place for the development of the New Zealand's UFB: a government-owned agency, Crown Fibre Holdings (CFH); private investors who jointly with CFH own the Local Fibre Companies (LFCs) which will operate the UFB; and Retail Service Providers (RSP) that will provide end-user services by purchasing wholesale services to the LFCs. Relying on a normative economics approach that uses recent advances in the theory of platform-based markets with cross-network effects–also known as theory of two-sided platforms–the paper proposes a novel view of the way markets over the UFB will unfold. On one hand, the theory is used to explain the rationale behind regulatory decisions already made and their effect on the development of UFB-based markets for contents and services. Such analysis is followed, on the other hand, by the introduction of a simple taxonomy for the RSPs which provides the framework to argue about the most likely scenarios for service deployment and competition to develop over the UFB. The analytical framework reveals that the UFB ecosystem will be fraught with cross-network externalities which are the basis for regulatory decisions already adopted and the source of particular forms of strategic behavior adopted by the UFB-based market innovators.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL: http://www.sciencedirect.com/science/article/pii/S0308596112001206
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

    Article provided by Elsevier in its journal Telecommunications Policy.

    Volume (Year): 36 (2012)
    Issue (Month): 9 ()
    Pages: 724-735

    as
    in new window

    Handle: RePEc:eee:telpol:v:36:y:2012:i:9:p:724-735
    DOI: 10.1016/j.telpol.2012.06.015
    Contact details of provider: Web page: http://www.elsevier.com/wps/find/journaldescription.cws_home/30471/description#description

    Order Information: Postal: http://www.elsevier.com/wps/find/journaldescription.cws_home/30471/bibliographic
    Web: http://www.elsevier.com/wps/find/journaldescription.cws_home/30471/bibliographic

    References listed on IDEAS
    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.:

    as
    in new window


    1. Jean‐Charles Rochet & Jean Tirole, 2006. "Two‐sided markets: a progress report," RAND Journal of Economics, RAND Corporation, vol. 37(3), pages 645-667, 09.
    2. Jean-Charles Rochet & Jean Tirole, 2014. "Platform Competition in Two-Sided Markets," CPI Journal, Competition Policy International, vol. 10.
    3. E. Glen Weyl, 2010. "A Price Theory of Multi-sided Platforms," American Economic Review, American Economic Association, vol. 100(4), pages 1642-1672, September.
    4. Jean-Charles Rochet & Jean Tirole, 2002. "Cooperation Among Competitors: Some Economics Of Payment Card Associations," RAND Journal of Economics, The RAND Corporation, vol. 33(4), pages 549-570, Winter.
    5. Oecd & Nea, 2012. "Multilateral agreements," Nuclear Law Bulletin, OECD Publishing, vol. 2011(2), pages 107-129.
    6. Crocioni, Pietro, 2011. "Net Neutrality in Europe: Desperately seeking a market failure," Telecommunications Policy, Elsevier, vol. 35(1), pages 1-11, February.
    7. Oecd, 2011. "Framework Agreements," SIGMA Public Procurement Briefs 19, OECD Publishing.
    Full references (including those not matched with items on IDEAS)

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:eee:telpol:v:36:y:2012:i:9:p:724-735. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.