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Do market failures hamper the perspectives of broadband?

Author

Listed:
  • Machiel van Dijk
  • J. Poort
  • Bert Minne
  • Machiel Mulder
  • Henry van der Wiel

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.

Suggested Citation

  • Machiel van Dijk & J. Poort & Bert Minne & Machiel Mulder & Henry van der Wiel, 2005. "Do market failures hamper the perspectives of broadband?," CPB Document 102, CPB Netherlands Bureau for Economic Policy Analysis.
    • Handle: RePEc:cpb:docmnt:102
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    References listed on IDEAS

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    Cited by:

    1. Harold Creusen & Arno Meijer & Gijsbert Zwart & Henry van der Wiel, 2008. "Static efficiency in Dutch supermarket chain," CPB Document 163, CPB Netherlands Bureau for Economic Policy Analysis.
    2. Machiel van Dijk & Machiel Mulder, 2005. "Regulation of telecommunication and deployment of broadband," CPB Memorandum 131, CPB Netherlands Bureau for Economic Policy Analysis.

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    More about this item

    JEL classification:

    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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