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The impact of alternative public policies on the deployment of new communications infrastructure: A survey

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  • Briglauer, Wolfgang
  • Frübing, Stefan
  • Vogelsang, Ingo

Abstract

Our survey reviews the theoretical and empirical literature on all alternative policies to promote the deployment of new fiber-based communications infrastructure. Since such investment is expected to induce substantial positive externalities, dynamic efficiency becomes a particularly important policy goal. The available policies refer to i) different kinds of ex ante sector-specific regulations including cost-based access regulations as well as softer regulations such as regulatory holidays or geographically differentiated regulations, ii) deregulatory approaches based on effective competition law implementation and competitive market structures including allowance of co-investment models, and iii) public subsidies to cover non-profitable ('white') areas. Our survey identifies the most significant research gaps, finding that numerous studies related to the impact of access regulations exist, whereas only a much smaller branch of literature addresses the impact of competition policies, and even fewer studies analyze the impact of public subsidies on new communications deployment. Moreover, our work allows for a generic framework for policy recommendations that identifies the comparative advantages of the individual policy options for different market structures and for varying degrees of externalities. We find that public subsidies are the dominant policy alternative in white areas, whereas access regulations can be the preferred policy in white or 'grey' areas, where only monopoly structure or co-investment models lead to private investment. Deregulatory policies might be preferable in grey areas, if there is sufficient pressure from competitive outside options and if competition law is strong. Finally, deregulatory policies including soft regulation are the dominant policy in 'black' areas, where several independent infrastructure operators exist.

Suggested Citation

  • Briglauer, Wolfgang & Frübing, Stefan & Vogelsang, Ingo, 2015. "The impact of alternative public policies on the deployment of new communications infrastructure: A survey," ZEW Discussion Papers 15-003, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  • Handle: RePEc:zbw:zewdip:15003
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    Cited by:

    1. Briglauer, Wolfgang & Cambini, Carlo & Grajek, Michał, 2017. "Speeding Up the Internet: Regulation and Investment in European Fiber Optic Infrastructure," 28th European Regional ITS Conference, Passau 2017 169451, International Telecommunications Society (ITS).
    2. Joan Calzada & Begoña García-Mariñoso & Jordi Ribé & Rafael Rubio & David Suárez, 2018. "Fiber deployment in Spain," Journal of Regulatory Economics, Springer, vol. 53(3), pages 256-274, June.
    3. Krämer Jan & Vogelsang Ingo, 2016. "Co-Investments and Tacit Collusion in Regulated Network Industries: Experimental Evidence," Review of Network Economics, De Gruyter, vol. 15(1), pages 35-61, March.
    4. Briglauer, Wolfgang & Holzleitner, Christian & Vogelsang, Ingo, 2016. "The need for more efficient public funding of new communications infrastructure in EU member states," Information Economics and Policy, Elsevier, vol. 36(C), pages 26-35.
    5. Briglauer, Wolfgang & Cambini, Carlo & Fetzer, Thomas & Hüschelrath, Kai, 2017. "The European electronic communications code: A critical appraisal with a focus on incentivizing investment in next generation broadband networks," ZEW Discussion Papers 17-027, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    6. repec:spr:epolin:v:45:y:2018:i:2:d:10.1007_s40812-017-0075-8 is not listed on IDEAS
    7. Bertschek, Irene & Briglauer, Wolfgang & Hüschelrath, Kai & Krämer, Jan & Frübing, Stefan & Kesler, Reinhold & Saam, Marianne, 2016. "Metastudie zum Fachdialog Ordnungsrahmen für die Digitale Wirtschaft: Im Auftrag des Bundesministeriums für Wirtschaft und Energie (BMWi)," ZEW Expertises, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research, number 147040, October.
    8. Brito, Duarte & Tselekounis, Markos, 2016. "Access regulation and the entrant's mode of entry under multi-product competition in telecoms," Information Economics and Policy, Elsevier, vol. 37(C), pages 20-33.

    More about this item

    Keywords

    survey; policy framework; investment; new communications infrastructure; regulation; competition; subsidies;

    JEL classification:

    • L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation
    • L44 - Industrial Organization - - Antitrust Issues and Policies - - - Antitrust Policy and Public Enterprise, Nonprofit Institutions, and Professional Organizations
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications

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