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Journal Article•DOI•

Access Regulation and the Transition from Copper to Fiber Networks in Telecoms

Marc Bourreau1, Carlo Cambini2, Carlo Cambini3, Pinar Dogan4•
Télécom ParisTech1, Polytechnic University of Turin2, European University Institute3, Harvard University4
08 Oct 2013-Social Science Research Network-
TL;DR: In this paper, the impact of different forms of access obligations on firms' incentives to migrate from the legacy copper network to next generation broadband infrastructures is studied, where the authors analyze geographically differential access prices of copper (that depend on whether or not an alternative fiber network has been deployed in the area).
Abstract: In this paper we study the impact of different forms of access obligations on firms’ incentives to migrate from the legacy copper network to next generation broadband infrastructures. We analyze geographically differential access prices of copper (that depend on whether or not an alternative fiber network has been deployed in the area) and ex-ante access obligations for fiber networks. We discuss how these regulatory schemes fare in addressing the tension among different objectives, such as the promotion of static efficiency, fostering investments in new infrastructures, and avoiding unnecessary duplication of (fiber) networks.

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  • The Centre is home to a large post-doctoral programme and hosts major research programmes and projects, and a range of working groups and ad hoc initiatives.
  • The research agenda is organised around a set of core themes and is continuously evolving, reflecting the changing agenda of European integration and the expanding membership of the European Union.
  • The EUI and the RSCAS are not responsible for the opinion expressed by the author(s).

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RSCAS 2013/52
Robert Schuman Centre for Advanced Studies
Florence School of Regulation
Access regulation and the transition from copper to
fiber networks in telecoms
Marc Bourreau, Carlo Cambini, Pınar Doğan
European University Institute
Robert Schuman Centre for Advanced Studies
Florence School of Regulation
Access regulation and the transition from copper to fiber
networks in telecoms
Marc Bourreau, Carlo Cambini, Pınar Doğan
EUI Working Paper RSCAS 2013/52
This text may be downloaded only for personal research purposes. Additional reproduction for other
purposes, whether in hard copies or electronically, requires the consent of the author(s), editor(s).
If cited or quoted, reference should be made to the full name of the author(s), editor(s), the title, the
working paper, or other series, the year and the publisher.
ISSN 1028-3625
© Marc Bourreau, Carlo Cambini, Pınar Doğan, 2013
Printed in Italy, July 2013
European University Institute
Badia Fiesolana
I – 50014 San Domenico di Fiesole (FI)
Italy
www.eui.eu/RSCAS/Publications/
www.eui.eu
cadmus.eui.eu
Robert Schuman Centre for Advanced Studies
The Robert Schuman Centre for Advanced Studies (RSCAS), created in 1992 and directed by Stefano
Bartolini since September 2006, aims to develop inter-disciplinary and comparative research and to
promote work on the major issues facing the process of integration and European society.
The Centre is home to a large post-doctoral programme and hosts major research programmes and
projects, and a range of working groups and ad hoc initiatives. The research agenda is organised
around a set of core themes and is continuously evolving, reflecting the changing agenda of European
integration and the expanding membership of the European Union.
Details of the research of the Centre can be found on:
http://www.eui.eu/RSCAS/Research/
Research publications take the form of Working Papers, Policy Papers, Distinguished Lectures and
books. Most of these are also available on the RSCAS website:
http://www.eui.eu/RSCAS/Publications/
The EUI and the RSCAS are not responsible for the opinion expressed by the author(s).
Florence School of Regulation
The Florence School of Regulation (FSR) is a partnership between the Robert Schuman Centre for
Advanced Studies (RSCAS) at the European University Institute (EUI), the Council of the European
Energy Regulators (CEER) and the Independent Regulators Group (IRG). Moreover, as part of the
EUI, the FSR works closely with the European Commission.
The objectives of the FSR are to promote informed discussions on key policy issues, through
workshops and seminars, to provide state-of-the-art training for practitioners (from European
Commission, National Regulators and private companies), to produce analytical and empirical
researches about regulated sectors, to network, and to exchange documents and ideas.
At present, its scope is focused on the regulation of Energy (electricity and gas markets), of
Communications & Media, and of Transport.
This series of working papers aims at disseminating the work of scholars and practitioners on current
regulatory issues.
For further information
Florence School of Regulation
Robert Schuman Centre for Advanced Studies
European University Institute
Via Boccaccio, 151
I-50133 Firenze
Tel.: +39 055 4685 751
Fax: +39 055 4685 755
E-mail: fsr@eui.eu
http://www.eui.eu/RSCAS/ProfessionalDevelopment/FSR/
Citations
More filters
Posted Content•
Speeding up the internet: regulation and investment in European fiber optic infrastructure

[...]

Wolfgang Briglauer, Carlo Cambini1, Carlo Cambini2, Michal Grajek3•
Polytechnic University of Turin1, European University Institute2, European School of Management and Technology3
03 May 2017-Research Papers in Economics
TL;DR: In this article, the authors study how the coexistence of access regulations for legacy and fiber networks shapes the incentives to invest in network infrastructure and develop a theoretical model explaining investment incentives by incumbent telecom operators and heterogeneous entrants and test its main predictions using panel data from 27 EU member states over the last decade.
Abstract: In this paper we study how the coexistence of access regulations for legacy (copper) and fiber networks shapes the incentives to invest in network infrastructure. To this end, we develop a theoretical model explaining investment incentives by incumbent telecom operators and heterogeneous entrants and test its main predictions using panel data from 27 EU member states over the last decade. Our theoretical model extends the existing literature by, among other things, allowing for heterogeneous entrants in internet access markets, as we consider both other telecom and cable TV operators as entrants. In the empirical part, we use a novel data set including information on physical fiber network investments, legacy network access regulation and recently imposed fiber access regulations. Our main finding is that more stringent access regulations for both the legacy and the fiber networks harm investments by incumbent telecom operators, but, in line with our theoretical model, do not affect cable TV operators.

26 citations

Journal Article•DOI•
The European Electronic Communications Code: A critical appraisal with a focus on incentivizing investment in next generation broadband networks

[...]

Wolfgang Briglauer, Carlo Cambini1, Carlo Cambini2, Thomas Fetzer3, Kai Hüschelrath3 •
Instituto Politécnico Nacional1, European University Institute2, University of Mannheim3
01 Nov 2017-Telecommunications Policy
TL;DR: In this paper, a detailed review of the most relevant regulatory measures that is, co-investment models as well as different types of access regulation is provided, with one key aim being the provision of sufficient incentives for infrastructure investments into high-speed communication networks.

19 citations

Journal Article•DOI•
Geographic access markets and investments

[...]

Marc Bourreau1, Carlo Cambini2, Steffen Hoernig3, Steffen Hoernig4•
Télécom ParisTech1, Polytechnic University of Turin2, Universidade Nova de Lisboa3, Center for Economic and Policy Research4
01 Jun 2015-Information Economics and Policy
TL;DR: In this article, the adoption of access regimes that differ according to the prevailing degree of infrastructure competition in different geographical areas of a country is analyzed, and it is shown that, compared to a uniform access price, geographically differentiated access prices improve welfare and incentivize investment.

18 citations

Journal Article•DOI•
Does regulation of basic broadband networks affect the adoption of new fiber-based broadband services?

[...]

Wolfgang Briglauer, Carlo Cambini1, Carlo Cambini2, Carlo Cambini3•
Instituto Politécnico Nacional1, Bocconi University2, European University Institute3
01 Apr 2019-Industrial and Corporate Change
TL;DR: In this article, the authors analyzed the impact of regulatory interventions on the adoption of fiber-based broadband technology by households and firms in EU25 (25 European Union member states) countries using panel data from 2003 to 2015.
Abstract: 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.

12 citations

Posted Content•
Unbundling the Incumbent and Entry into Fiber: Evidence from France

[...]

Marc Bourreau1, Lukasz Grzybowski1, Maude Hasbi1•
Télécom ParisTech1
24 Jan 2018-Social Science Research Network
TL;DR: In this paper, the authors use panel data on 36,104 municipalities in metropolitan France over the period 2010-2014 to estimate two models of entry into local markets by: (i) alternative operators using wholesale access to the legacy copper network via local loop unbundling (LLU), and (ii) the incumbent and two alternative operator using the fiber technology.
Abstract: We use panel data on 36,104 municipalities in metropolitan France over the period 2010-2014 to estimate two models of entry into local markets by: (i) alternative operators using wholesale access to the legacy copper network via local loop unbundling (LLU), and (ii) the incumbent and two alternative operators using the fiber technology. We find that a higher number of LLU competitors, and hence a less concentrated local market, has a positive impact on entry by fiber operators. Moreover, the presence of upgraded cable network in the local municipality stimulates fiber deployment. However, firms may choose to upgrade copper lines instead of investing in fiber networks. We use the estimates to calculate entry thresholds into local markets, which are substantially lower for broadband provision via LLU than via fiber and decrease over time. Fiber deployment becomes cheaper over time, but according to our estimates it will remain unprofitable for the vast majority of municipalities in France within the next years.

12 citations

References
More filters
Posted Content•
Network externalities, competition, and compatibility

[...]

Michael L. Katz
01 Jan 1985-The American Economic Review

6,100 citations

Posted Content•
Broadband Infrastructure and Economic Growth

[...]

Nina Czernich, Oliver Falck, Tobias Kretschmer, Ludger Wößmann
01 Jan 2009-Research Papers in Economics
TL;DR: In this paper, the authors estimate the effect of broadband infrastructure, which enables high-speed internet, on economic growth in the panel of OECD countries in 1996-2007, and find that a 10 percentagepoint increase in broadband penetration raises annual per-capita growth by 0.9-1.5 percentage points.
Abstract: We estimate the effect of broadband infrastructure, which enables high-speed internet, on economic growth in the panel of OECD countries in 1996-2007. Our instrumental-variable model derives its non-linear first stage from a logistic diffusion model where pre-existing voice-telephony and cable-TV networks predict maximum broadband penetration. We find that a 10 percentage-point increase in broadband penetration raises annual per-capita growth by 0.9-1.5 percentage points. Results are robust to country and year fixed effects and controlling for linear second-stage effects of our instruments. We verify that our instruments predict broadband penetration but not diffusion of contemporaneous technologies like mobile telephony and computers.

767 citations

Journal Article•DOI•
Broadband investment and regulation: A literature review

[...]

Carlo Cambini1, Yanyan Jiang•
Polytechnic University of Turin1
01 Nov 2009-Telecommunications Policy
TL;DR: In this paper, the authors survey the relevant theoretical and empirical literature on the relationship between regulation, at both retail and wholesale level, and investment in telecoms infrastructures, and conclude that the picture that emerges is not conclusive, and further research is still needed, both theoretically and empirically, to better understand the real impact of regulatory incentives on investments.

385 citations

Journal Article•DOI•
Strategic investments with spillovers, vertical integration and foreclosure in the broadband access market

[...]

Øystein Foros1•
Norwegian School of Economics1
01 Jan 2004-International Journal of Industrial Organization
TL;DR: In this paper, the authors analyse competition between two retailers of broadband access when they differ in their ability to offer value-added services, and show that access price regulation may lower consumer surplus and welfare if retailers do not differ too much.

177 citations

Journal Article•DOI•
Access Pricing, Competition, and Incentives to Migrate From "Old" to "New" Technology

[...]

Marc Bourreau1, Carlo Cambini2, Pinar Dogan3•
Télécom ParisTech1, Polytechnic University of Turin2, Harvard University3
01 Nov 2012-International Journal of Industrial Organization
TL;DR: In this paper, the authors analyze the incentives of an incumbent and an entrant to migrate from an "old" technology to a "new" technology, and discuss how the terms of wholesale access affect this migration.

127 citations

Related Papers (5)
Access regulation and the transition from copper to fiber networks in telecoms

[...]

20 Feb 2014-Journal of Regulatory Economics
Marc Bourreau, Carlo Cambini, Pinar Dogan
Dynamic access pricing and investment in alternative infrastructures

[...]

01 Mar 2010-International Journal of Industrial Organization
Alessandro Avenali, Giorgio Matteucci, Pierfrancesco Reverberi
Geographic Access Rules and Investments

[...]

01 Jun 2012-Social Science Research Network
Marc Bourreau, Carlo Cambini, Carlo Cambini, Steffen Hoernig 
Unbundling and infrastructure competition for broadband adoption

[...]

01 Sep 2014-Telecommunications Policy
Chatchai Kongaut, Erik Bohlin
Strategic choice of financing systems in regulated and interconnected industries

[...]

01 Feb 2005-Journal of Public Economics
Anna Bassanini, Jerome Pouyet
Frequently Asked Questions (6)
Q1. What are the objectives of the Robert Schuman Centre for Advanced Studies?

The objectives of the FSR are to promote informed discussions on key policy issues, through workshops and seminars, to provide state-of-the-art training for practitioners (from European Commission, National Regulators and private companies), to produce analytical and empirical researches about regulated sectors, to network, and to exchange documents and ideas. 

At present, its scope is focused on the regulation of Energy (electricity and gas markets), of Communications & Media, and of Transport. 

The Robert Schuman Centre for Advanced Studies (RSCAS), created in 1992 and directed by Stefano Bartolini since September 2006, aims to develop inter-disciplinary and comparative research and to promote work on the major issues facing the process of integration and European society. 

The research agenda is organised around a set of core themes and is continuously evolving, reflecting the changing agenda of European integration and the expanding membership of the European Union. 

Florence School of Regulation Robert Schuman Centre for Advanced Studies European University Institute Via Boccaccio, 151 I-50133 Firenze Tel.: +39 055 4685 751 Fax: +39 055 4685 755 E-mail: fsr@eui.eu http://www.eui.eu/RSCAS/ProfessionalDevelopment/FSR/ aa w~0.400 a 0.1 0.2 0.3 0.40.200.300.100.00 

Details of the research of the Centre can be found on: http://www.eui.eu/RSCAS/Research/Research publications take the form of Working Papers, Policy Papers, Distinguished Lectures and books.