Given the experience of the COVID 19 epidemic a paramount goal of telecommunications policy is very high capacity connectivity, such as FTTH or 5G, for everyone. This means both universal network coverage and universal user uptake. The aim of the presented paper is twofold. First, it considers the choice for universal gigabits from a comprehensive set of policy tools. Second, it includes how policy tools have been finessed in recent years in order to deal with this issue.

Policy options for achieving universal gigabits include regulation, competition policy, laissez faire, spectrum policy, public enterprise, and subsidies. The best combination of these policies is highly regional and depends, in particular, on population and economic density and on pre-existing infrastructures. For the purpose of the analysis regions can be classified as white, gray and black. Roughly, white areas require subsidies, gray areas only allow for single very high capacity networks and black areas allow for duplicative very high capacity networks. While the authors of the presented paper discuss policy combinations by area type, the size of the areas itself endogenously depends on policies. In white areas the policy decision is between public investment, direct subsidies and cross-subsidies, both of which involve tradeoffs. The relationship between infrastructure and the services provided over them can also influence infrastructure investments. This holds, in particular for over-the-top services (OTTs). Direct subsidies can be minimized via auctions such as currently practiced in the US. Black areas allow for some infrastructure competition. The authors of the presented paper make the case that even if only two full-scale providers are feasible competition policy should be favored over regulation. Particularly interesting are grey areas, where regulation is most appropriate. They discuss regulatory options, such as access regulation, co-investment and asset sharing, all of which can “blacken” gray areas. While laissez faire can increase gray and reduce white areas, it is unlikely that it will substantially increase total uptake. Spectrum policy has great potential to reduce white areas and increase black areas. Bureaucratic tendencies still hinder this potential in most countries.    

Speaker

Ingo Vogelsang

Boston University, USA und ZEW

Date

15.09.2020 | 12:00 - 13:30

Event Location

Online via ZOOM


Department
  • Digital Economy
Keywords