abstract
There has been an extensive debate about the role of broadband access regulation on market outcomes. This paper estimates the impact that the different modes of competition have had on broadband take-up to date, using a data set for EU27 countries. We find that ULL, which is one of main types of access-based competition in Europe, has had a positive impact on broadband take-up. However, the impact of ULL becomes smaller as its share increases. That is, ULL entry is less effective in areas where ULL take up is already high. Further, there is evidence of a crowding out effect between ULL and inter-platform competition. This means that ULL is less effective in enhancing broadband penetration in the areas where alternative networks already have a significant share of broadband lines.
1. Introduction
Operators around the world are deploying new fibre networks (next generation access networks or NGAs) in order to offer very high-speed broadband services. There has been much debate about the role that governments and regulators should play in helping to encourage the deployment these new networks and encourage the adoption of ultra-fast broadband services. A key question is whether access based obligations over copper networks should be extended to fibre infrastructures. The main argument in favour of access regulation is that it makes new entry easier, as the entrant has to build only part of a network, or no network at all. This potentially allows for more intense competition if there is a greater number of market players. However, there is a concern that mandating access could deter operators’ from investing in fibre networks in the first place if the operators think that they will struggle to make a return on their original investment.
