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Public Private Interplay for Next Generation Access Networks: Lessons and Warnings from Japan’s Broadband Success

Author

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  • Kenji E. KUSHIDA

    (Stanford University)

Abstract

This paper contributes to the discussion of how Public Private Interplay (PPI) can be used to foster Next Generation Access (NGA) buildouts in Europe by introducing the experience of Japan. Japan, which succeeded in both promoting nationwide network buildouts and fostering competitive dynamics that led to the world's fastest and cheapest broadband services and deploying them nationwide. The process entailed deregulation, which unleashed new entrepreneurial private actors, and re-regulation that protected them from incumbent carriers. The resulting market dynamics lowered Digital Subscriber Line (DSL) prices, influencing the market price for Fiber-To-The-Home (FTTH), for which the government had heavily subsidized carriers. Central government initiatives, combined with local incentives, led to an almost 100% broadband accessibility within a few years. However, Japan quickly discovered that taking advantage of the broadband environment to produce innovation, productivity growth, and economic dynamism, was far more difficult than facilitating its creation. It discovered regulatory barriers for the use of Information and Communications Technology (ICT) in various areas of the economy. Like Europe, Japan was not home to the ICT lead-user enterprises and industries that drove the ICT revolution, producing innovation and productivity gains. Moreover, the advent of US-centered cloud computing services potentially decreases the minimum bandwidth requirement to access global-scale computing power. The development of wireless technologies far cheaper than Japan's nationwide FTTH also merits serious consideration for European policy discussions.

Suggested Citation

  • Kenji E. KUSHIDA, 2013. "Public Private Interplay for Next Generation Access Networks: Lessons and Warnings from Japan’s Broadband Success," Communications & Strategies, IDATE, Com&Strat dept., vol. 1(91), pages 13-34, 3rd quart.
  • Handle: RePEc:idt:journl:cs9101
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    File URL: http://repec.idate.org/RePEc/idt/journl/CS9101/CS91_KUSHIDA.pdf
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    References listed on IDEAS

    as
    1. Kenji Kushida, 2011. "Leading without Followers: How Politics and Market Dynamics Trapped Innovations in Japan’s Domestic “Galapagos” Telecommunications Sector," Journal of Industry, Competition and Trade, Springer, vol. 11(3), pages 279-307, September.
    2. Cohen, Stephen S & Zysman, John & DeLong, Bradford J, 2000. "Tools for Thought: What is New and Important about the "E-conomy"?," UCAIS Berkeley Roundtable on the International Economy, Working Paper Series qt0c97w1gn, UCAIS Berkeley Roundtable on the International Economy, UC Berkeley.
    3. Nucciarelli, Alberto & Sadowski, Bert M. & Achard, Paola O., 2010. "Emerging models of public-private interplay for European broadband access: Evidence from the Netherlands and Italy," Telecommunications Policy, Elsevier, vol. 34(9), pages 513-527, October.
    4. Bart van Ark & Mary O'Mahoney & Marcel P. Timmer, 2008. "The Productivity Gap between Europe and the United States: Trends and Causes," Journal of Economic Perspectives, American Economic Association, vol. 22(1), pages 25-44, Winter.
    5. Falch, Morten & Henten, Anders, 2010. "Public private partnerships as a tool for stimulating investments in broadband," Telecommunications Policy, Elsevier, vol. 34(9), pages 496-504, October.
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    Cited by:

    1. Winkler, Kay, 2014. "Potential Effects of New Zealand's Policy on Next Generation High-Speed Access Networks," Working Paper Series 4347, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.

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    More about this item

    Keywords

    broadband; PPI; industry analysis; political economy; Japan.;
    All these keywords.

    JEL classification:

    • L5 - Industrial Organization - - Regulation and Industrial Policy
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights

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