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On the (In) Effectiveness of Policies to Promote Broadband Diffusion in Europe (2003-2010): An Econometric Assessment

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  • Michele Cincera
  • Antonio Estache
  • Lauriane Dewulf

Abstract

This paper presents an updated empirical assessment of the relative effectiveness of intra-platform and inter-platform competition in terms of broadband diffusion in Europe between 2003 and 2010. It relies on an econometric analysis of 18 European countries. To approximate two forms of competition within a same platform, we distinguish between service-based access and facility-based access. The first type requires less investment from entrants than the second which allows entrants to differentiate their product. Our results update and validate earlier studies. We show that service-based intra-platform competition brought by access regulation is still not an accelerating factor of broadband diffusion (or investment) in Europe. In contrast, we find that both facility-based intra-platform competition brought by access regulation and inter-platform competition brought by the deployment of non-DSL technologies effectively fuels broadband diffusion. In sum, many EU countries may have underestimated the potential payoff of stimulating product differentiation through inter-platform and service-based intra-platform competition for the diffusion of broadband in Europe.

Suggested Citation

  • Michele Cincera & Antonio Estache & Lauriane Dewulf, 2012. "On the (In) Effectiveness of Policies to Promote Broadband Diffusion in Europe (2003-2010): An Econometric Assessment," Working Papers ECARES ECARES 2012-032, ULB -- Universite Libre de Bruxelles.
  • Handle: RePEc:eca:wpaper:2013/128909
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    Cited by:

    1. Calzada, Joan & Martínez-Santos, Fernando, 2014. "Broadband prices in the European Union: Competition and commercial strategies," Information Economics and Policy, Elsevier, vol. 27(C), pages 24-38.

    More about this item

    Keywords

    ICT; broadband diffusion; competition;

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation
    • L63 - Industrial Organization - - Industry Studies: Manufacturing - - - Microelectronics; Computers; Communications Equipment

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