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The Economics of Next Generation Access Networks and Regulatory Governance: Towards Geographic Patterns of Regulation

Author

Listed:
  • Giovanni Battista AMENDOLA

    (Telecom Italia, Roma)

  • Lorenzo Maria PUPILLO

    (Telecom Italia, Roma)

Abstract

This paper examines the mix of technical, regulatory, and business strategy issues that arise in implementing next generation broadband platforms in Europe. Our review of some European studies on NGAN in Europe and our specific focus on the Italian situation, in particular on the competitive situation in Milano, shows the relevant flaw of continuing to advocate national patterns of regulation. In fact, the deployment of NGAN calls for a radical shift of regulation on a geographic level. The recognition that a NGAN business case does exist for OLO in a number of local areas, mainly metropolitan ones, has relevant regulatory implications.In the first place, since the conditions of competition differ significantly among local areas, regulation should promote both incumbents' and OLO's investments in NGAN by limiting ex ante interventions to those enduring economic bottlenecks found at a specific geographic markets level. In the second place, market definition is the most important step in the market analysis procedure to help decide whether to regulate a given service provided over a NGAN or not. We have proposed a taxonomy of local areas that may be adopted in a country like Italy for a correct geographic definition of markets 4 and 5 and, as a consequence, for the imposition of appropriate remedies.

Suggested Citation

  • Giovanni Battista AMENDOLA & Lorenzo Maria PUPILLO, 2008. "The Economics of Next Generation Access Networks and Regulatory Governance: Towards Geographic Patterns of Regulation," Communications & Strategies, IDATE, Com&Strat dept., vol. 1(69), pages 85-108, 1st quart.
  • Handle: RePEc:idt:journl:cs6904
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    File URL: http://repec.idate.org/RePEc/idt/journl/CS6904/CS69_AMENDOLA_PUPILLO.pdf
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    References listed on IDEAS

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    1. Marcus, J. Scott, 2005. "Is the U.S. Dancing to a Different Drummer?," MPRA Paper 2514, University Library of Munich, Germany.
    2. Oecd, 2005. "Next Generation Network Development in OECD Countries," OECD Digital Economy Papers 89, OECD Publishing.
    3. de Bijl, Paul & Peitz, Martin, 2008. "Innovation, convergence and the role of regulation in the Netherlands and beyond," Telecommunications Policy, Elsevier, vol. 32(11), pages 744-754, December.
    4. Joshua Gans & Stephen King, 2003. "Access Holidays for Network Infrastructure Investment," Agenda - A Journal of Policy Analysis and Reform, Australian National University, College of Business and Economics, School of Economics, vol. 10(2), pages 163-178.
    5. Graeme Guthrie, 2006. "Regulating Infrastructure: The Impact on Risk and Investment," Journal of Economic Literature, American Economic Association, vol. 44(4), pages 925-972, December.
    6. M. Cave & L. Correa & P. Crocioni, 2006. "Regulating for Non-price Discrimination: The case of UK Fixed Telecoms," Competition and Regulation in Network Industries, Intersentia, vol. 7(3), pages 391-416, September.
    7. Timothy Tardiff, 2007. "Changes in industry structure and technological convergence: implications for competition policy and regulation in telecommunications," International Economics and Economic Policy, Springer, vol. 4(2), pages 109-133, August.
    8. Avner Shaked & John Sutton, 1982. "Relaxing Price Competition Through Product Differentiation," Review of Economic Studies, Oxford University Press, vol. 49(1), pages 3-13.
    9. Cave, Martin, 2006. "Six Degrees of Separation : Operational Separation as a Remedy in European Telecommunications Regulation," MPRA Paper 3572, University Library of Munich, Germany.
    10. Guthrie, Graeme, 2006. "Regulating Infrastructure: The Impact on Risk and Investment," Working Paper Series 3851, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.
    11. de Bijl, P.W.J. & Peitz, M., 2007. "Innovation, Convergence and the Role of Regulation in the Netherlands," Discussion Paper 2007-016, Tilburg University, Tilburg Law and Economic Center.
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    Citations

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    Cited by:

    1. Martin Lundborg, 2010. "Lessons Learned from the Regulation of LLU for the Future Regulation of NGA Networks," Chapters,in: Promoting New Telecom Infrastructures, chapter 3 Edward Elgar Publishing.
    2. Scott Marcus & Dieter Elixmann, 2010. "International Regulatory Comparisons: The Evolution of IP-based Fiber," Chapters,in: Regulation and the Evolution of the Global Telecommunications Industry, chapter 9 Edward Elgar Publishing.
    3. Gerli, Paolo & Van der Wee, Marlies & Verbrugge, Sofie & Whalley, Jason, 2017. "The involvement of utilities in the development of broadband infrastructure: A comparison of EU case studies," 28th European Regional ITS Conference, Passau 2017 169461, International Telecommunications Society (ITS).
    4. Bruno SORIA & Félix HERNÁNDEZ-GIL, 2010. "Do NGAN Economics Allow for Network Competition?," Communications & Strategies, IDATE, Com&Strat dept., vol. 1(78), pages 23-44, 2nd quart.
    5. Donald K. STOCKDALE, Jr., 2011. "Geographically Segmented Regulation: Lessons from the FCC for European Communications Markets," Communications & Strategies, IDATE, Com&Strat dept., vol. 1(82), pages 85-104, 2nd quart.
    6. Lehr, William H. & Chapin, John M., 2010. "On the convergence of wired and wireless access network architectures," Information Economics and Policy, Elsevier, vol. 22(1), pages 33-41, March.
    7. Tenbrock, Sebastian, 2013. "Die Ausgestaltung des Glasfaserausbaus in Deutschland: Ergebnisse einer empirischen Untersuchung," Arbeitspapiere 136, University of Münster, Institute for Cooperatives.
    8. Gerli, Paolo & Whalley, Jason, 2016. "Infrastructure investment on the margins of the market: The role of niche infrastructure providers in the UK," 27th European Regional ITS Conference, Cambridge (UK) 2016 148671, International Telecommunications Society (ITS).

    More about this item

    Keywords

    Next Generation Networks; geographic markets; geographic remedies; infrastructure sharing; market definition.;

    JEL classification:

    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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