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The impact of alternative public policies on the deployment of new communications infrastructure: A survey

Author

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  • Briglauer, Wolfgang
  • Frübing, Stefan
  • Vogelsang, Ingo
Abstract
Our survey reviews the theoretical and empirical literature on all alternative policies to promote the deployment of new fiber-based communications infrastructure. Since such investment is expected to induce substantial positive externalities, dynamic efficiency becomes a particularly important policy goal. The available policies refer to i) different kinds of ex ante sector-specific regulations including cost-based access regulations as well as softer regulations such as regulatory holidays or geographically differentiated regulations, ii) deregulatory approaches based on effective competition law implementation and competitive market structures including allowance of co-investment models, and iii) public subsidies to cover non-profitable ('white') areas. Our survey identifies the most significant research gaps, finding that numerous studies related to the impact of access regulations exist, whereas only a much smaller branch of literature addresses the impact of competition policies, and even fewer studies analyze the impact of public subsidies on new communications deployment. Moreover, our work allows for a generic framework for policy recommendations that identifies the comparative advantages of the individual policy options for different market structures and for varying degrees of externalities. We find that public subsidies are the dominant policy alternative in white areas, whereas access regulations can be the preferred policy in white or 'grey' areas, where only monopoly structure or co-investment models lead to private investment. Deregulatory policies might be preferable in grey areas, if there is sufficient pressure from competitive outside options and if competition law is strong. Finally, deregulatory policies including soft regulation are the dominant policy in 'black' areas, where several independent infrastructure operators exist.

Suggested Citation

  • Briglauer, Wolfgang & Frübing, Stefan & Vogelsang, Ingo, 2015. "The impact of alternative public policies on the deployment of new communications infrastructure: A survey," ZEW Discussion Papers 15-003, ZEW - Leibniz Centre for European Economic Research.
    • Handle: RePEc:zbw:zewdip:15003
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    More about this item

    Keywords

    survey; policy framework; investment; new communications infrastructure; regulation; competition; subsidies;
    All these keywords.

    JEL classification:

    • L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation
    • L44 - Industrial Organization - - Antitrust Issues and Policies - - - Antitrust Policy and Public Enterprise, Nonprofit Institutions, and Professional Organizations
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications

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