The Impact of Alternative Public Policies on the Deployment of New Communications Infrastructure – A Survey

Wolfgang Briglauer 1 , Stefan Frübing 1 ,  and Ingo Vogelsang 2
  • 1 Centre for European Economic Research (ZEW Mannheim), Mannheim, Germany
  • 2 Boston University, Department of Economics, Boston, MA, USA
Wolfgang Briglauer, Stefan Frübing and Ingo Vogelsang

Abstract

This survey of the theoretical and empirical literature on alternative policies to promote new fiber-based communications infrastructures addresses (i) various kinds of ex ante sector-specific regulations, (ii) deregulatory approaches based on effective competition law implementation and competitive market structures including co-investment models, and (iii) public subsidies to cover non-profitable (white) areas. The authors identify significant research gaps and present a generic framework for policy recommendations. Public subsidies emerge as the dominant policy alternative in white areas, whereas access regulations can be the preferred policy in white or gray areas, where only monopoly structure or co-investment models lead to private investment. Deregulatory policies might be preferable in gray areas, provided 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.

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