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Regulatory federalism and industrial policy in broadband telecommunications


  • Daniel Montolio

    () (Universitat de Barcelona & IEB)

  • Francesc Trillas

    () (Universitat Autònoma de Barcelona, SP-SP Center (IESE) & IEB)


We analyse the impact of regulation, industrial policy and jurisdictional allocation on broadband deployment using a theoretical model and an empirical estimation. Although central powers may be more focused and internalize interjurisdictional externalities, decentralized powers may internalize local horizontal policy spillovers and use a diversity of objectives as a commitment device in the presence of sunk investments. The latter may, for instance, alleviate the collective action problem of the joint use of rights of way and other physical infrastructures. In the empirical exercise, using data for OECD and EU countries for the period 1999-2006, we examine whether centralization promotes new telecommunications markets, in particular the broadband access market. The existing literature, in the main, claims it does, but we find no support for this claim in our data. Our results show that indicators of national industrial policy are a weakly positive determinant of broadband deployment and that different measures of centralization are either irrelevant or have a negative impact on broadband penetration.

Suggested Citation

  • Daniel Montolio & Francesc Trillas, 2011. "Regulatory federalism and industrial policy in broadband telecommunications," Working Papers 2011/15, Institut d'Economia de Barcelona (IEB).
  • Handle: RePEc:ieb:wpaper:2011/8/doc2011-15

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    References listed on IDEAS

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    Cited by:

    1. Briglauer Wolfgang & Frübing Stefan & Vogelsang Ingo, 2014. "The Impact of Alternative Public Policies on the Deployment of New Communications Infrastructure – A Survey," Review of Network Economics, De Gruyter, vol. 13(3), pages 227-270, September.
    2. Briglauer, Wolfgang, 2017. "Does State Aid For Broadband Deployment In Rural Areas Close The Digital And Economic Divide?," Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168055, Verein für Socialpolitik / German Economic Association.
    3. Kappeler, Andreas & Solé-Ollé, Albert & Stephan, Andreas & Välilä, Timo, 2013. "Does fiscal decentralization foster regional investment in productive infrastructure?," European Journal of Political Economy, Elsevier, vol. 31(C), pages 15-25.
    4. Rajabiun, Reza & Middleton, Catherine, 2013. "Regulation, investment and efficiency in the transition to next generation networks: Evidence from the European Union," 24th European Regional ITS Conference, Florence 2013 88536, International Telecommunications Society (ITS).
    5. Trillas, Francesc & Xifré, Ramon, 2016. "Institutional reforms to integrate regulation and competition policy: Economic analysis, international perspectives, and the case of the CNMC in Spain," Utilities Policy, Elsevier, vol. 40(C), pages 75-87.
    6. Rajabiun, Reza & Middleton, Catherine A., 2013. "Multilevel governance and broadband infrastructure development: Evidence from Canada," Telecommunications Policy, Elsevier, vol. 37(9), pages 702-714.
    7. Briglauer, Wolfgang & Dürr, Niklas S. & Falck, Oliver & Hüschelrath, Kai, 2016. "Does state aid for broadband deployment in rural areas close the digital and economic divide?," ZEW Discussion Papers 16-064, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.

    More about this item


    Regulation; industrial policy; decentralization; broadband;

    JEL classification:

    • L50 - Industrial Organization - - Regulation and Industrial Policy - - - General
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism

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