Does regulation of basic broadband networks affect the adoption of new fiber-based broadband services?

This article provides evidence on the decision of consumers to move from an “old” (copper-based) to a “new” (fiber-based) broadband technology, taking into account the impact of regulatory interventions imposed on the old technology. The analysis in this article has been applied to a sample of EU25 (25 European Union member states) countries using panel data from 2003 to 2015 on the adoption of fiber-based broadband technology by households and firms. Results show that an increase in the regulated price for accessing the old network favors consumer adoption of the new technology. In particular, we find that an increase in the unbundling price of 10% increases fiber-based adoption in the range of 0.7%–1%. Our results also provide insights on the take-up rate of the new technology, i.e. on the ratio between adopted and deployed fiber-based services and networks. By comparing the quantitative effects of regulation, we find that an increase in the access price decreases the take-up rate, meaning that the impact on fiber coverage is stronger than on fiber adoption.