Next Generation Access (NGA) supply side interventions—An international comparison

Over the last years, technical and economic developments towards the deployment of Next Generation (Access) Networks have triggered discussions under which circumstances investments into physical infrastructure are economically viable. In many countries the discussion has arisen regarding conditions under which private investment will/will not be undertaken and whether or not in such cases public policy measures should support deployment. This could come in different ways—from incentivizing private investments to deploying new “state-owned” networks. Public policy can have an impact for example by intervening into a competitive market. The paper tries to provide answers as to “why” such interventions and supply side policies are undertaken (thereby referring to the central role that broadband infrastructures have for the economy) and “how” such interventions take place, for example an analysis of the public policy interventions to drive Next Generation Access Network deployment. The article thereby derives policy patterns that have occurred in different regions of the world.     

Determinants of retailers’ decisions to use public or private grades and standards: Evidence from the fresh produce market of São Paulo,Brazil

This paper models retailers’ choices between public and private grades and standards (G&S) and their means of administering them. It focuses on the firm-specific factors influencing the decision. Increasing use of private G&S worldwide, particularly by large, powerful retail chains has implications for competition, participation, and the effectiveness and efficiency of public policy regarding G&S. Drawing from a study of fresh produce markets in São Paulo, Brazil, the paper shows that the importance of the product in the firm’s activities or sales, market power, scale of operations, and investment in brand capital and reputation are key firm-specific factors encouraging the use of private G&S regimes over public. Important contextual determinants are the strategic objective of the standard, the institutional environment, and the characteristics of the product and market. A range of formal and informal, private and public methods for administering G&S was found. The paper discusses policy implications of the results, focusing on issues of substitutability and complementarity between public and private G&S regimes.     

Providing incentives for private investment in municipal broadband networks: Evidence from the Netherlands

The paper examines the incentives provided by public–private partnerships (PPPs) to stimulate private market parties to participate in municipal fibre networks in the Netherlands. Although there has been a growing interest of Dutch municipalities in fibre technologies since the beginning of the 2000s, PPP models to implement these technologies developed rather slowly in response to changes in public policy, the legislative environment and experiences gained in early projects. In 2005, the viability of a cooperative PPP model called “Ons Net” Nuenen was tested in an experimental setting for the first time using government subsidies. In undertaking a techno-economic analysis of the PPP “Ons Net” in Nuenen, the paper examines its objectives, boundaries and viability. It shows that the experience of this PPP based on ubiquity, open fibre access and demand aggregation provided important incentives for companies to invest in (other) municipal fibre networks in the Netherlands. The paper concludes furthermore that mandating of open access will become a key task for (local) governments to foster competitive entry and to facilitate innovation in municipal fibre networks.     

The impact of network relationships on internationalization process: An empirical study of Chinese private enterprises

Chinese private enterprises have been internationalizing rapidly during the last two decades. This study adopts a network approach to examine what factors affect the internationalization process of Chinese private enterprises. Our survey of 108 private Chinese enterprises in the manufacturing sector in Zhejiang province in southeastern China revealed that business networks and personal networks affect the internationalization activities of Chinese private enterprises. Specifically, business networks have a positive impact on the timing of the first foreign market entry, the internationalization pace, and resource commitments, whereas personal networks have a positive impact on the internationalization pace and resource commitments, but not on the timing of the first foreign market entry. In this paper, we report our findings of our survey, discuss the contribution that this study makes to the existing internationalization literature, and suggest future research directions. Policy implications on how to facilitate the internationalization process are also discussed.     

Long term risk sharing contracts as an approach to establish public–private partnerships for investment into next generation access networks

This paper develops an investment/pricing model for the deployment of basic broadband networks which, along with other applications, is applicable to public–private partnership projects. In particular, a new investment model is suggested to be used for finance deployment over a longer term by enabling both private and public investors to participate in the roll-out of next generation access (NGA) infrastructure. This so-called “long-term risk sharing concept” has several notable benefits compared with the traditional regulatory approach. Above all, the model enables both private operators and public authorities to share the risk of investing in NGA infrastructure. Thus the model offers a way for public authorities to achieve a timely and countrywide roll-out of NGA networks, including in areas where NGA investment would otherwise not occur.     

Demand-side broadband policy in the context of digital transformation: An examination of SME digital advisory policies in Wales

Increasing attention has been paid to the potential for demand-side policies to stimulate use of broadband networks. Such policies form part of the increasing digitalisation of the economy and wider society. This is an area where governments are also facing challenges in their efforts to maximise the efficiency and effectiveness of their policies. The paper sheds light on the impact that the transition towards digital has had on demand-side policies supporting the adoption of broadband and digital technologies by SMEs, and draws out the implications for policy, using a case study of Wales in the UK over a ten-year period. It shows that digitalisation has seen policy mechanisms and messages evolving as policy makers have created a more integrated and multi-channel approach to the delivery of advisory support to SMEs, but that the emergence of multiple types of actors (large digital platform businesses) and ongoing digitalisation are adding complexity to policies and their interaction with other forms of public and private business support.     

Take your partners: Public private interplay in Australian and New Zealand plans for next generation broadband

Within a few days of each other in early 2009, the national governments of Australia and New Zealand announced separate plans to invest heavily in advanced broadband networks. Taxpayers in each country will contribute at least half the estimated cost of fibre-to-the-premises networks reaching the overwhelming majority of households and businesses within 8–10 years. These complex and controversial forms of ‘public private interplay’ demonstrate three trends: a shift away from the liberalization and privatization policy consensus of the last two decades; shared convictions about the anticipated size of fast broadband’s economic and social benefits, and about the need for wholesale-only fixed line network operation to maximize those benefits; and the unlikely impact of the global financial and economic crisis in stimulating investment in particular infrastructures seen as critical to the national economies that emerge from it. This article discusses industry structures and regulation in Australia and New Zealand, their long history of public investment in telecommunications and the recent popularity of public private partnerships (PPPs) with Australian state governments. It outlines the ambitious broadband plans and surveys their prospects. Like so many other policy actions following the global economic crisis, these are distinctively national responses to internationally shared challenges.     

Anatomy of a public-private partnership: Hold-up and regulatory commitment in Ultrafast Broadband

In recent years, the preference for purely private funding and ownership of telecommunications networks has given way to a ‘new wisdom’ that some form of public funding is now likely necessary if faster and more capacious next generation access (NGA) networks are to be constructed in a timely fashion for the majority of the population. Policy-makers are charged with deciding how that public investment will take place. One approach is via Public-Private Partnerships (PPPs), where public and private actors collaborate in UFB (Ultrafast Fibre Broadband) investment, construction and operation. However, the body of analysis of PPPs in NGA networks to guide policy-makers is scant.By using the concept of regulatory commitment, the paper compares the experiences gained in a hold-up situation in PPPs in other infrastructures (e.g. roading) with the UFB context. A case study of New Zealand's Ultrafast Fibre Broadband Initiative is used to draw new insights for government purchasers and regulatory agencies. In comparing the different forms of PPPs, the paper shows that UFB PPPs reverse the typical direction of financing and ownership observed in roading PPPs. Financing and asset ownership are separated in UFB PPPs, increasing the potential for misalignment of incentives and the likelihood that the public party can use its legislative powers to alter regulatory settings after the PPP contract is signed, and thereby hold up the private party once existing network assets are sunk. Whilst the government instigating the PPP may not be inclined to act opportunistically, a successive government facing different political priorities does not face the same incentives. To the extent that the private party can anticipate this risk, it should structure the initial agreement to ensure that the public party is penalised if such an event occurs (i.e. an automatic right to favourable renegotiation or payment of compensation). Such terms will discourage opportunism, so that the project benefits from time-consistent alignment of incentives and objectives.     

Market reform and private trade in Eastern and Southern Africa

This article reviews the experience of market reform in Eastern and Southern Africa and highlights some key lessons learned. A distinction is drawn between countries whose policy regime before reform was favourable to food production and those whose policies were unfavourable, and alternative reform paths are described. The two key issues emerging are the role of the public sector after reform, for which there is still no clearly appropriate model, and how the strong short-term response of the private sector to trading opportunities can be transformed into investment. Post-reform markets have been competitive, but operate under tight constraints with little evidence of significant capital accumulation. Critical research issues to inform policy making are identified.     

Cereal marketing liberalization in Tanzania

There is considerable evidence that cereal market liberalization in Tanzania has been a success in spite of poor roads, shortage of capital and vehicles, and lack of market infrastructure and standardized measures. The legal status of the private sector is unclear, however, and public sector policies still favour a heavy official involvement in the marketing system. Farm-gate prices for maize fall off rapidly as one moves away from the primary marketing centres, but on-farm storage of maize poses farmers no insuperable difficulties. Successful implementation of liberalization calls for clarity and consistency in government policy, the reform of financial services, the sale of unused storage capacity to the private sector, the more active involvement of farmers in the liberalized system, the strengthening of extension services, and a policy for regulating interannual price variations.     

Mixed Oligopoly and Market Power Mitigation: Evidence from the Colombian Wholesale Electricity Market*

Using information on price bids in wholesale electricity pools and empirical techniques described in the literature on electricity markets, this study identifies the market power mitigation effect of public firms in the Colombian market. The results suggest that while private firms exercise less market power than is predicted by a profit-maximization model, there are marked differences between private and public firms in their exercise of unilateral market power. These findings support the hypothesis of the market power mitigation effect of public firms.     

A CDS approach to induce facilities-based competition over NGA networks

The current regulatory framework in the European NGA market provides the basic principles for the gradual migration from service-based competition over the legacy copper access networks to facilities-based competition over fiber-based Next Generation Access (NGA) networks. This paper initially reviews the related literature and shows that: (i) an unbundling policy that boosts entry by alternative operators promotes service-based competition but provides operators with disincentives to invest in network upgrade; (ii) there is no consensus about the optimal regulatory policy that promotes competition and encourages investments in NGA networks; and (iii) the reviewed research articles are not consistent with the current regulatory framework in the European NGA market in terms of both the evolution of the regulatory goals over time and the recommended regulatory settings. This paper aims to propose a novel approach in order to effectively meet the current regulatory goals using the recommended settings. It is shown that the proposed approach, which is based on the basic principles governing a Credit Default Swap (CDS), provides an effective migration path towards facilities-based competition over NGA networks.     

Stabilizing food markets in eastern and southern Africa

A major challenge for agricultural policy in Africa is how to address the market instability-related causes of low farm productivity and food insecurity. This paper highlights structural changes affecting the behavior of food markets in eastern and southern Africa and discusses their implications for the design of strategies to stabilize food prices. These changes include (1) an increasing trend in maize prices toward import parity levels, reflecting an emerging structural maize deficit in much of the region; (2) increasingly diversified food consumption patterns in both rural and urban areas; (3) highly concentrated marketed maize surplus, which have largely unrecognized implications for the magnitude of price risk faced by most farm households; and (4) the strategic interactions between private and public marketing actors leading in some cases to heightened market instability and food crises. In the prevailing dual market environment now characterizing most of the region, greater coordination, transparency, and consultation between private and public market actors is needed to achieve reasonable levels of food price stability and predictability.     

我国民营企业买壳上市风险与对策浅析

随着社会迅速发展,民营企业在国民经济中的地位日益凸显,而其融资难则是一个公认的问题。近几年,我国民营企业纷纷以买“壳”、借“壳”的方式进入资本市场,虽可获得“双赢”结果,但也会引起诸多问题。本文分析了我国民营企业买壳上市存在的主要风险,并提出相应对策。     

Returns and Information Transmission Dynamics in Public and Private Real Estate Markets

This paper examines U.S. public and private commercial real estate returns at the aggregate level and by the four major property types over the 1994–2012 time period. Returns are carefully adjusted for differences between public and private markets in financial leverage, property type focus and management fees. Unconditionally, we find that passive portfolios of unlevered core real estate investment trusts (REITs) outperformed their private market benchmark by 49 basis points (annualized) over the 1994–2012 sample period. Our baseline vector autoregression results suggest that REIT returns do not embed additional commercial real‐estate‐specific information useful in predicting private market returns. These results strongly suggest that equity REIT returns react to fundamental (latent) asset pricing information more quickly than private market returns given their greater liquidity and price revelation. REITs therefore serve as a fundamental information transmission channel to private market returns when asset pricing variables are omitted.     

Geographic Portfolio Allocations,Property Selection and Performance Attribution in Public and Private Real Estate Markets

This article examines the effects of geographic portfolio concentrations on the return performance of U.S. public real estate investment trusts versus private commercial real estate over the 1996–2013 time period. Adjusting private market returns for differences in geographic concentrations with public markets, we find that core private market performance falls. Using return performance attribution analysis, we find that the geographic allocation effect constitutes only a small portion of the total return difference between listed and private market returns, whereas individual property selection within geographic locations explains, in part, the documented outperformance of listed versus private real estate market returns.     

Municipal support of wireless access network rollout: A game theoretic approach

Next generation access networks are expected to bring ubiquitous broadband access and have attracted interest of municipal governments. This paper investigates the support by municipal authorities for the rollout of such a city-wide wireless broadband access network. Different business cases for 3G and WiFi operators are developed and it is indicated how to model the specificities for commercial versus public players. Furthermore, a game theoretic approach is used to investigate the investment options of the municipal player. It is shown that a partnership between a commercial and public player is the most likely investment strategy. However, bringing more players into the competitive environment reduces the intention of the commercial partner to engage in the public–private partnership (PPP).     

Acquisitions of private vs. public firms: Private information,target selection,and acquirer returns

The acquisition of privately held firms is a prevalent phenomenon that has received little attention in mergers and acquisitions research. In this study, we examine three questions: (1) What drives the acquirer's choice between public and private targets? (2) Do acquisitions of private targets elicit a more positive stock market reaction than acquisitions of public targets, which, on average, destroy value for acquirers' shareholders? (3) Do acquirers gain when their selection of a public or private target fits the theory? In this paper, we argue that the lack of information on private targets limits the breadth of the acquirer's search and increases its risk of not evaluating properly the assets of private targets. At the same time, less information on private targets creates more value‐creating opportunities for exploiting private information, whereas the market of corporate control for public targets already serves as an information‐processing and asset valuation mechanism for all potential bidders. Using an event study and survey data, we find that: (1) acquirers favor private targets in familiar industries and turn to public targets to enter new business domains or industries with a high level of intangible assets; (2) acquirers of private targets perform better than acquirers of public targets on merger announcement, after controlling for endogeneity bias; (3) acquirers of private firms perform better than if they had acquired a public firm, and acquirers of public firms perform better than if they had acquired a private firm. These results support the expectation that acquirer returns from their target choice (private/public) are not universal but depend on the acquirer's type of search and on the merging firms' attributes. Copyright © 2007 John Wiley & Sons, Ltd.