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Cost and benefits from infrastructure competition. Estimating welfare effects from broadband access competition

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  • Höffler, Felix

Abstract

Competition between parallel infrastructures incorporates opposing welfare effects. The gain from reduced deadweight loss might be outweighed by the inefficient duplication of an existing infrastructure. Using data from broadband Internet access for western Europe 2000-04, this paper investigates which effect prevails empirically. Infrastructure competition between DSL and cable TV had a significant and positive impact on the broadband penetration. However, comparing the additional social surplus attributable to cable competition with the cable investments, it can be concluded that, in the absence of significant positive externalities, infrastructure competition has probably not been welfare enhancing.

Suggested Citation

  • Höffler, Felix, 0. "Cost and benefits from infrastructure competition. Estimating welfare effects from broadband access competition," Telecommunications Policy, Elsevier, vol. 31(6-7), pages 401-418, July.
    • Handle: RePEc:eee:telpol:v:31:y::i:6-7:p:401-418
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    Citations

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    Cited by:

    1. Troulos, Costas & Maglaris, Vasilis, 2011. "Factors determining municipal broadband strategies across Europe," Telecommunications Policy, Elsevier, vol. 35(9), pages 842-856.
    2. Daniel Montolio & Elisa Trujillo, 2012. "What drives investment in telecommunications? The role of regulation, firms’ internationalization and market knowledge," Working Papers 2012/1, Institut d'Economia de Barcelona (IEB).
    3. Daniel Montolio & Elisa Trujillo, 2012. "What drives investment in telecommunications? The role of regulation, firms’ internationalization and market knowledge," Working Papers 2012/1, Institut d'Economia de Barcelona (IEB).
    4. Okamoto, Yoshikazu & Nakamura, Akihiro, 2013. "The influence of local loop unbundling on investment by incumbent telecommunications operators in the OECD member countries," 24th European Regional ITS Conference, Florence 2013 88499, International Telecommunications Society (ITS).
    5. Bert Sadowski & Mathijs Verheijen & Alberto Nucciarelli, 2010. "Strategic Options for Mobile Broadband Services: The Case of a Municipal WiMAX Network in The Netherlands," Chapters, in: Morten Falch & Jan Markendahl (ed.), Promoting New Telecom Infrastructures, chapter 7, Edward Elgar Publishing.
    6. Baranes, Edmond & Bourreau, Marc, 2005. "An Economist's Guide to Local Loop Unbundling," MPRA Paper 2440, University Library of Munich, Germany.

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