On the (In) Effectiveness of Policies to Promote Broadband Diffusion in Europe (2003-2010): An Econometric Assessment

Michele Cincera, Antonio Estache and Lauriane Dewulf

Working Papers ECARES from ULB -- Universite Libre de Bruxelles

Abstract: This paper presents an updated empirical assessment of the relative effectiveness of intra-platform and inter-platform competition in terms of broadband diffusion in Europe between 2003 and 2010. It relies on an econometric analysis of 18 European countries. To approximate two forms of competition within a same platform, we distinguish between service-based access and facility-based access. The first type requires less investment from entrants than the second which allows entrants to differentiate their product. Our results update and validate earlier studies. We show that service-based intra-platform competition brought by access regulation is still not an accelerating factor of broadband diffusion (or investment) in Europe. In contrast, we find that both facility-based intra-platform competition brought by access regulation and inter-platform competition brought by the deployment of non-DSL technologies effectively fuels broadband diffusion. In sum, many EU countries may have underestimated the potential payoff of stimulating product differentiation through inter-platform and service-based intra-platform competition for the diffusion of broadband in Europe.

Keywords: ICT; broadband diffusion; competition (search for similar items in EconPapers)
JEL-codes: D43 L43 L63 (search for similar items in EconPapers)
Pages: 17 p.
Date: 2012-09
New Economics Papers: this item is included in nep-com, nep-eur, nep-ict and nep-reg
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Citations: View citations in EconPapers (2)

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