Strategic choice and broadband divergence in the transition to next generation networks: Evidence from Canada and the U.S

Reza Rajabiun and Catherine Middleton

Telecommunications Policy, 2018, vol. 42, issue 1, 37-50

Abstract: This article investigates how infrastructure competition among broadband network infrastructure operators in Canada and the U.S. has influenced their incentives to increase fixed broadband connection speeds and invest in next generation fiber-to-the-premises (FTTP) technologies. The evolution of measured broadband speeds since the late 2000s documents growing differences in the incentives of dominant broadband operators to respond to demand for higher speed connectivity by increasing connectivity speeds they deliver to their customers. Dominant network operators in Canada have shown relatively stronger incentives than their counterparts in the U.S. to invest in and increase the capacity of legacy platforms. In the U.S. FTTP deployment incentives have been somewhat stronger, but network operators have been more reluctant to upgrade legacy technologies to deliver higher speeds. Diversity of strategic choices by large operators helps explain increasing regional and local broadband infrastructure gaps within the two countries. A high dividend payout financial strategy and increasing vertical integration appear to enhance the potential for overinvestment and inefficient duplication in legacy platforms by competing infrastructure providers.

Keywords: Broadband; Innovation; Creative destruction; Strategy; Technological change (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:eee:telpol:v:42:y:2018:i:1:p:37-50

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DOI: 10.1016/j.telpol.2017.08.001

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