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Fiber vs. vectoring: Limiting technology choices in broadband expansion

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  • Fourberg, Niklas
  • Korff, Alex

Abstract

The upgrade of legacy infrastructure is a challenging undertaking in general. The underlying issues are especially prominent for telecommunications networks outside of urban areas. Using German micro-level data, we identify the structural determinants for fiber optics deployment and its extent. We also measure the role of technology competition from the existing infrastructures, VDSL-Vectoring and TV-Cable. In this setting and exploiting a natural experiment, a technologically restrictive policy as proposed by the European Commission is found to be ineffective in promoting fiber deployment. Policy interventions in the form of subsidies targeted at specific local infrastructure projects, however, raise the likelihood of fiber deployment by a substantial margin. A targeted, proactive policy approach is therefore needed to overcome structural and geographical disadvantages.

Suggested Citation

  • Fourberg, Niklas & Korff, Alex, 2020. "Fiber vs. vectoring: Limiting technology choices in broadband expansion," DICE Discussion Papers 334, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    • Handle: RePEc:zbw:dicedp:334
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    References listed on IDEAS

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    1. Bertschek Irene & Briglauer Wolfgang & Hüschelrath Kai & Kauf Benedikt & Niebel Thomas, 2015. "The Economic Impacts of Broadband Internet: A Survey," Review of Network Economics, De Gruyter, vol. 14(4), pages 201-227, December.
    2. Bourreau, Marc & Cambini, Carlo & Doğan, Pınar, 2012. "Access pricing, competition, and incentives to migrate from “old” to “new” technology," International Journal of Industrial Organization, Elsevier, vol. 30(6), pages 713-723.
    3. Bouckaert, Jan & van Dijk, Theon & Verboven, Frank, 2010. "Access regulation, competition, and broadband penetration: An international study," Telecommunications Policy, Elsevier, vol. 34(11), pages 661-671, December.
    4. Maya Bacache & Marc Bourreau & Germain Gaudin, 2014. "Dynamic Entry and Investment in New Infrastructures: Empirical Evidence from the Fixed Broadband Industry," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 44(2), pages 179-209, March.
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    Cited by:

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    2. Muhammad Farooq & Jie Cheng & Noor Ullah Khan & Roselina Ahmad Saufi & Nagina Kanwal & Hanieh Alipour Bazkiaei, 2022. "Sustainable Waste Management Companies with Innovative Smart Solutions: A Systematic Review and Conceptual Model," Sustainability, MDPI, vol. 14(20), pages 1-19, October.

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    More about this item

    Keywords

    Fiber expansion; Technology competition; Technology regulation; Subsidies; Regional Infrastructure;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

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