Wolfgang Briglauer

The impact of infrastructure and service-based competition on the deployment of next generation access networks: Recent evidence from the European member states

This work identifies the most important determinants of next generation access (NGA) network deployment, using data from the EU27 member states for the years 2005–2011. Our results indicate that the more service-based competition is pronounced the more negative is the impact on NGA deployment, while competitive pressure from broadband cable and mobile affects NGA deployment in an inverted U-shaped manner. We further find that there are severe adjustment costs and stickiness towards the desired long-term level of NGA infrastructure. It appears that the approach of the European Commission to force service-based competition via cost-based access regulation will not elicit the huge new investment needed for a comprehensive NGA roll-out.

Market Analyses under the New European Communications Framework - Some Conceptual Issues

For electronic communications markets, a new regulatory framework was enacted and should have been transformed into national law by all member states of the EU by the summer of 2003. In fact, this new regulatory framework is composed of five different directives, stretching the goals of a harmonized regulatory approach within the National Regulatory Agencies (NRAs). On whole, the new regulatory framework is designed as to ensure the transition to general competition law. As the title suggests, our specific focus will be on the completely rearranged and much broader market analysis procedure within the new framework. In doing this, the paper is supplemented by the relevant legal documents. Accordingly, this paper makes various references to important passages in the Framework Directive, the Commission’s SMP Guidelines and IRG/ERG documents discussing methodological aspects. Concretely, the directives (especially Articles 14–16 of the Framework Directive) in conjunction with the Commission’s SMP Guidelines outline a three stage analysis process: preliminary definition of relevant commimications markets, examination of effective competition on those markets and discussion of appropriate regulatory instruments based on any competition deficits. Although it appears to be practically useful to structure these stages sequentially, logical linkages, as it will be shown, conceptually exist among them.

How to Fill the Digital Gap? The (Limited) Role of Regulation

This paper provides evidence on the migration from an “old” technology to a “new” technology, taking into account the impact that regulatory interventions on the old one might have on the incentives to invest and adopt the new one. This analysis has been applied to a sample of EU27 countries using panel data from 2004 to 2014 on the adoption, coverage and take-up rate of ultra-fast broadband infrastructures, whose development is one of the flagship initiatives of the Europe 2020 programmes. Results show that a 1% increase in the regulated price to access the old technology increases the adoption and the investment on the new broadband technology by ~0.45% and ~0.47%. These effects are not homogeneous across countries and are weakened in Eastern European countries, where the existing old broadband infrastructures are less developed than in the rest of Europe. It has also been shown that the access price to old networks negatively affects the take-up rate of the new technology-based services, thus calling for the need of more specific and complementary demand side policy incentives to enhance service adoption

The economic impacts of telecommunications networks and broadband internet: A survey

We provide a structured overview of the quantitative literature on the economic impacts of telecommunications networks and broadband internet. Differentiating between wireline and wireless technologies as well as broadband availability and broadband adoption, respectively, we review studies investigating the impacts on economic growth, employment and regional development as well as productivity and firm performance. Eventually, the survey does not only allow the identification of main research gaps but also provides useful information for policy makers on the significance and importance of communication networks for social welfare.

Promoting Consumer Migration to New Communications Technology: Does Regulation Affect the Digital Gap?

This paper provides evidence on the migration of consumers from an “old” (copper-based) to a “new” (fiber-based) communications technology, taking specifically into account the impact of regulatory interventions imposed on the old technology. The analysis has been applied to a sample of EU25 countries using panel data from 2003 to 2014 on the adoption (i.e. the demand of subscriptions by households and firms), and take-up rate of ultra-fast broadband technology (i.e. the ratio between fiber subscribers - “homes connected” - to population covered with fiber connections - “homes passed”). Results show that an increase in the regulated price for accessing the existing old network favours consumer migration to the new technology. However, the access price to old technology negatively affects the take-up rate of the new technology. This implies that access regulation also positively affects broadband coverage but more than demand adoption. Hence, in order to raise broadband take-up rate, other instruments are needed to support ultra-fast broadband subscriptions.

The Need for More Efficient Public Funding of New Communications Infrastructure in EU Member States

Ubiquitous coverage of new high-speed broadband networks, as foreseen by the European Commission, still appears to be a rather unrealistic objective in most European Union member states without government intervention in terms of funding network deployment in unprofitable areas. We contend, however, that the current contract practice of fixing ex ante targets for network expansion is inefficient given the uncertainty about future returns on high-speed broadband services and the public authorities’ incomplete information about the costs of the network provider. This paper suggests delegating the choice of the network expansion to the typically much better informed network operator. Furthermore, we show that such contracts can be implemented based on existing accounting data and that it is not necessary to undertake any additional ex post verification of cost or demand data as is currently the case under claw-back rules.

Path Dependencies versus Efficiencies in Regulation: Evidence from 'Old' and 'New' Broadband Markets in the EU

This paper examines the determinants of sector-specific regulation imposed on broadband markets related both to efficiency objectives of regulators and to those of narrowly defined interest groups. We test hypotheses derived from the normative and positive theoretical literature employing recent panel data on 27 European Union member states taking into account endogeneity of the underlying regulation and market structure variables. Our empirical specification employs three different estimators based on instrumental variables. We find evidence supporting both regulators pursuing normative objectives and inefficiencies related to regulatory path dependence, bureaucracy goals and an inadequate consideration of competition from mobile broadband networks. Our results call for adjustments in the institutional design of the decision making process under the current European Union regulatory framework.

Speeding Up the Internet: Regulation and Investment in European Fiber Optic Infrastructure

In this paper we study how the coexistence of access regulations for legacy (copper) and fiber networks shapes the incentives to invest in network infrastructure. To this end, we develop a theoretical model explaining investment incentives by incumbent telecom operators and heterogeneous entrants and test its main predictions using panel data from 27 EU member states over the last decade. Our theoretical model extends the existing literature by, among other things, allowing for heterogeneous entrants in internet access markets, as we consider both other telecom and cable TV operators as entrants. In the empirical part, we use a novel data set including information on physical fiber network investments, legacy network access regulation and recently imposed fiber access regulations. Our main finding is that more stringent access regulations for both the legacy and the fiber networks harm investments by incumbent telecom operators, but, in line with our theoretical model, do not affect cable TV operators.

The European Electronic Communications Code: A Critical Appraisal with a Focus on Incentivizing Investment in next Generation Broadband Networks

In September 2016, the European Commission (EC) published its proposal for a directive establishing the European Electronic Communications Code (EECC) – with one key aim being the provision of sufficient incentives for infrastructure investments into high-speed communication networks. Based on a detailed review of the theoretical and empirical literature of the most relevant regulatory measures – that is, co-investment models as well as different types of access regulation – we provide a critical appraisal of the respective provisions in the EECC. We find that, although the EECC can generally be seen as step into the right direction, the expected effects on investment incentives as well as substantial implementation challenges in combination with a high degree of complexity of the envisaged measures contain substantial potential for improvement.

Determinants of fast and ultra-fast broadband adoption

We review the existing literature on NGN adoption and its determinants in order to provide possible insights on sound policy interventions and present recent evidence across EU member states on NGN adoption, coverage and take-up rate pointing out the structural differences between EU15 and Eastern European countries. We also present evidence on the existence of network effects in NGN adoption, on the cross-price effect that access to standard broadband network might have on the demand of ultra-fast connections and, finally, on the willingness to pay for ultra-fast connections