Regulation and Investment in Next Generation Access Networks: Recent Evidence from the European Member States

Publication: Working/Discussion PaperWU Working Paper

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Abstract

Fibre-deployment of future telecommunications networks ("Next Generation Access" - NGA) is a
major challenge for sector-specific regulators as well as for investing firms. Although the future socioeconomic
importance of new telecommunications networks is uncontroversial, the related investment
activities vary substantially in international comparison. This work identifies the most important
determinants of NGA deployment, using data from the EU27 member states for the years 2005 to
2010. Our results indicate that stricter previous broadband access regulation has a negative impact on
NGA deployment, while competitive pressure from broadband 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 of strict cost-based access regulation will not elicit the huge new investment
needed for a comprehensive NGA roll-out. (authors' abstract)

Publication series

SeriesWorking Papers / Research Institute for Regulatory Economics
Number2012,1

WU Working Paper Series

  • Working Papers / Research Institute for Regulatory Economics

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