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Do market failures hamper the perspectives of broadband?

  • Machiel van Dijk

    ()

  • Bert Minne
  • Machiel Mulder
  • Henry van der Wiel

    ()

  • J. Poort

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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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. Fink, Carsten & Mattoo, Aaditya & Rathindran, Randeep, 2001. "Liberalizing basic telecommunications : the Asian experience," Policy Research Working Paper Series 2718, The World Bank.
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  8. Marcel Canoy & Paul de Bijl & Ron Kemp, 2004. "Access to telecommunications networks," Chapters, in: The Economics of Antitrust and Regulation in Telecommunications, chapter 8 Edward Elgar.
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  10. 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.
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