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Speeding up the internet: regulation and investment in European fiber optic infrastructure

Wolfgang Briglauer, Carlo Cambini, and Michal Grajek
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Carlo Cambini,: Politecnico di Torino

No ESMT-17-02, ESMT Research Working Papers from ESMT European School of Management and Technology

Abstract: 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.

Keywords: Internet access market; access regulation; investment; infrastructure; next generation networks; broadband; telecoms; cable operators and Europe (search for similar items in EconPapers)
JEL-codes: L96 L51 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com, nep-ict, nep-net, nep-pay and nep-reg
Date: 2017-05-03
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http://static.esmt.org/publications/workingpapers/ESMT-17-02.pdf First version, 2017 (application/pdf)

Related works:
Journal Article: Speeding up the internet: Regulation and investment in the European fiber optic infrastructure (2018) Downloads
Working Paper: Speeding Up the Internet: Regulation and Investment in European Fiber Optic Infrastructure (2017) Downloads
Working Paper: Speeding up the internet: Regulation and investment in European fiber optic infrastructure (2017) Downloads
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