Do market failures hamper the perspectives of broadband?

Machiel van Dijk, J. Poort, Bert Minne, Machiel Mulder and Henry van der Wiel

No 102, CPB Document from CPB Netherlands Bureau for Economic Policy Analysis

Abstract: This report analyses the broadband market and asks whether a specific role of government is necessary. As broadband telecommunication is seen as a source of productivity gains, the European Union and other regions are encouraging the deployment of a secure broadband infrastructure. In the Netherlands, there is some concern whether the supply of broadband capacity will meet the strongly increasing demand.The main conclusions are that presently, given current broadband policy, no considerable market failures exist. Firms have adequate incentives to invest in broadband, partly induced by specific regulation of access to the local copper loop. Hence, there is no need for changes in current broadband policy. Market failures in terms of knowledge spillovers are taken care of by other policies.As the broadband markets are very dynamic, unforeseen developments may emerge such as the appearance of new dominant techniques and market players. The best strategy for the government, in particular the competition authority, is to continuously monitor these markets, making timely intervention easier when needed.

JEL-codes: D61 D62 L51 O38 (search for similar items in EconPapers)
Date: 2005-12
New Economics Papers: this item is included in nep-eec, nep-mic and nep-net
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:cpb:docmnt:102

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