The Impact of Regulation and Competition on the Migration from Old to New Communications Infrastructure: Recent Evidence from EU27 Member States

Abstract

Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW. [vi] AbstractFibre-deployment of next-generation communications networks is currently a major challenge for investing firms as well as for national regulators and is also subject to hot debates at EU level. This work examines the role of regulatory policies and competition controlling for relevant supply and demand side factors. Our econometric model employs dynamic panel data methods that take into account potential endogeneity due to omitted heterogeneity, reverse causality and the dynamic investment specification.Our results indicate that relevant forms of previous broadband access regulations have had a negative impact on investment in new infrastructure. Furthermore, infrastructure-based competition from mobile operators and the replacement effect stemming from the incumbents' existing infrastructure exert a negative impact on ex ante investment incentives. As regards the dynamics of the adjustment process, we find that there are both short-term and long-term effects towards the desired infrastructure level.[1]

The Impact of Alternative Public Policies on the Deployment of New Communications Infrastructure – A Survey

“…Rather, the relationship depends on the definition of the competitive intensity and the oligopoly framework. Indeed, a related and more recent empirical study byBriglauer (2014b) which employs a bigger sample size does not find evidence for a non-linear relationship. Hence, the earlier result in might also be attributed to the fact that polynomial terms show good in-sample fit but lower out of-sample validity.…”