Demand estimation and market definition for broadband Internet services

This paper analyses residential demand for Internet access in Austria with a focus on broadband Internet connections. Austria has cable network coverage of about 50% and is, therefore, a good candidate to analyse the elasticity of demand for DSL where cable is available and where it is not. We also include mobile broadband via UMTS or HSDPA in our analysis and estimate various nested logit models to derive conclusions for market definition. The estimation results suggest that demand for DSL is elastic and that cable networks are likely to be in the same market as DSL connections both at the retail and at the wholesale level. We discuss possible implications for the regulation of wholesale broadband access markets. All views expressed are solely the authors’ and do not bind RTR or the Telekom-Control-Kommission (TKK) in any way nor are they official position of RTR or TKK.     

Information infrastructure: Who builds broadband networks?

This paper examines the essential difference between the U.S. and Japan, when one considers information infrastructure. There are seven perception gaps between the U.S. and Japan concerning Information Infrastructure policies. These gaps must be understood in order to compare the countries' governmental policies in this area. In looking at the present circumstances, the essential question to answer concerns who is to build, own and operate the network(s) of the infrastructure. Liberalization is certain to be a central factor in the ongoing telecommunications debates. Now that customers have had a taste of the liberalized market-place, the movement toward more open markets will be difficult to stop. When considering options, it is necessary to pay close attention to standardized network access and the increasingly important role software plays. These issues are causing us to take a new approach to the traditional role played by regulators. They also force a closer look at the appropriate structure of utility companies. This paper addresses the above issues in hopes of stimulating dialog on the new telecommunications infrastructure paradigm.     

Competition enhancing regulation and diffusion of innovation: the case of broadband networks

Regulating former telecommunications monopolies has often been legally and technically complex. Among other options, incumbent operators were mandated to share, sell or split their infrastructure thus encouraging market entry. Given the importance of broadband technologies, competitive access has become a policy priority. We use data from 167 broadband markets over a period of 11 years. Firm and intra-platform competition on the incumbent’s legacy network (Digital Subscriber Line) accelerate adoption of broadband, whereas competition over different access technologies does not. The duration of the different regulatory effects shows that simpler network changes have a long-lasting yet delayed effect compared to technically demanding ones.     

Residential demand estimation for bundled fixed-line and wireless mobile broadband services

This article is the first investigation of residential Internet markets in Thailand, in particular Bangkok. Bangkok is an interesting market to study as it is Thailand’s most populous province, and supports an advanced economy. The study offers a comprehensive discussion of the process to obtain cross-price elasticity estimates when Internet services are bundled. Interestingly, the empirical results reveal positive cross-price effects, i.e. Internet alternatives are viewed as substitutes by respondents in this market. This finding is plausible as the services differ essentially in their model of delivery.     

Evidence of a modest price decline in US broadband services

In this paper, we construct a consumer price index for broadband services in the United States using over 1500 service contracts offered by DSL and cable providers from 2004 through 2009. This exercise frames a range of open questions about measuring price changes in a manner that informs policy discussions about US broadband services. We employ approaches used commonly for constructing a consumer price index by using a mix of matched-model methods and hedonic price index estimations to adjust for qualitative improvements. We find a quality-adjusted price decline, but the evidence points towards a modest decline at most. Our estimates of the price decline range from 3% to 10% in quality-adjusted terms for the 5-years period, which is faster than the BLS estimates for the last 3 years. In contrast to other innovative industries that experience rapid price declines, such as computers or integrated circuits, the modest price decline for broadband services raises many questions.     

On selecting a technology evolution path for broadband access networks

The rapid growth in the number of Internet users has accelerated the use of high-speed Internet access services, including broadband multimedia services. In the delivery of broadband multimedia services to end-users, it is necessary to build a high-speed backbone and access network. To construct a broadband access network, several alternative technologies including xDSL, CATV, and FTTx have been suggested and implemented in telecommunication networks. However, even if a technology is proven to be optimal for the current environment, it can be deteriorated by the elapse of time or the advent of new challenging technologies in the future. In this article, we concentrate on the selection of an evolution path for broadband access networks. We developed an optimization model for selecting the best technology and evolution path with the minimum total cost. The problem can be formulated as a mixed integer programming model. With a scenario for demands and cost factors, we find the optimal evolution path by solving our model with the CPLEX program and illustrate some sample paths for the broadband access network evolution plan. Once the cost and the demand are defined in detail to reflect the real-world case, our model can be useful to generate a practical technology evolution plan for broadband access networks in real-world applications.     

ICT services and small businesses’ productivity gains: An analysis of the adoption of broadband Internet technology

We analyse the impact of the adoption of broadband Internet technology on the productivity performance of small and medium enterprises (SMEs). We distinguish access to the broadband infrastructure from the adoption of complementary services, i.e., different types of broadband software applications. The empirical analysis considers a sample of 799 firms observed from 1998 to 2004 that are representative of the population of Italian SMEs. Our econometric estimates indicate that the impact of the adoption by SMEs of basic broadband applications is negligible (or even negative). Conversely, SMEs are found to benefit from adopting selected advanced broadband applications depending on several contingent factors: (i) their industry of operations (services vs. manufacturing); (ii) the relevance of the specific broadband software applications for SMEs’ industry of operation; and (iii) the undertaking of complementary strategic and organisational changes.     

Health services research in nursing: current status and future directions

To assess the current status of health services research in nursing, 113 studies reported between 1980 and 1989 were reviewed. Identified gaps in this research included comprehensive cost-benefit and cost-effectiveness analyses, effects of technology on patient care, evaluations of information systems, evaluations of innovative care delivery approaches, and studies of ethical issues related to the use of scarce resources.     

The impact of regulation and competition on the adoption of fiber-based broadband services: recent evidence from the European union member states

Fiber deployment of next-generation high-speed broadband networks is considered to be a decisive development for any information-based society, yet investment activities and especially the adoption of fiber-based broadband services take place only very gradually in most countries. This work employs static and dynamic model specifications and identifies the most important determinants of the adoption of fiber-based broadband services with recent panel data from the European Union member states for the years from 2004 to 2012. The results show that the more effective previous broadband access regulation is, the more negative the impact on adoption, while competitive pressure from mobile networks affects adoption in a non-linear manner. Finally, we also find evidence for substantial network effects underlying the adoption process.     

Forecasting and analyzing the competitive diffusion of mobile cellular broadband and fixed broadband in Taiwan with limited historical data

Taiwan experienced the rapid growth of mobile cellular broadband from 2005 by introducing 3G operations and had higher penetration than the average of the developing countries, the world, and even the developed countries. There are many forecasting models which were developed and successfully predicted the diffusion of long lifecycle product, but there are very few forecasting models which were developed for predicting new products with short lifecycle. Assumption of these models is always the growth of products follows an S-shaped curve. As for the products which were just introduced to the market, it is very difficult to identify if they follow an S-shaped curve with their limited historical data. This research aims to apply Grey system theory to predict the diffusion of mobile cellular broadband and fixed broadband in Taiwan since Grey system theory has a characteristic which requires very limited primitive data (the least 4 data) to build a differential forecasting model. We use penetration as an indicator to describe the diffusion of new products. The numerical data show that the Grey forecasting models GM(1,1) built in this paper have higher prediction accuracy than logistic models and grey Verhulst models. Moreover, we apply Lotka–Volterra model to analyze the competitive relationship between mobile cellular broadband and fixed broadband. The empirical data show that the relationship is commensalism rather than predator–prey. These results can be extended to contribute to other researches.     

Product quality and competition: evidence from the broadband industry

Access to high-quality broadband internet is important in many different respects such as in communication, education, commerce and information acquisition. We investigate the relationship between the number of broadband providers in an area and the quality of broadband service provided where download speed is used as a proxy for quality. We find that increased competition in an area positively affects the access to fast download speeds. This finding is robust to three different top download speeds tested. Additionally, a theoretical model is provided which shows that competition can decrease the profits associated with offering slow speeds; this gives an incentive for providers to offer higher speeds as a way to increase profits.     

The future of farming: The value of ecosystem services in conventional and organic arable land. An experimental approach

In the current work, a novel, experimental ‘bottom-up’ approach is used to quantify the economic value of ecosystem services (ES) associated with highly modified arable landscapes in Canterbury, New Zealand. First, the role of land management practices in the maintenance and enhancement of ES in agricultural land was investigated by quantifying the economic value of ES at the field level under organic and conventional arable systems. This quantification was based on an experimental approach in contrast with earlier value transfer methods. Total economic value of ES in organic fields ranged from US $1610 to US $19,420 ha^− 1 yr^− 1 and that of conventional fields from US $1270 to US $14,570 ha^− 1 yr^− 1. The non-market value of ES in organic fields ranged from US $460 to US $5240 ha^− 1 yr^− 1. The range of non-market values of ES in conventional fields was US $50 — 1240 ha^− 1 yr^− 1. There were significant differences between organic and conventional fields for the economic values of some ES. Next, this economic information was used to extrapolate and to calculate the total and non-market value of ES in Canterbury arable land. The total annual economic and non-market values of ES for the conventional arable area in Canterbury (125,000 ha) were US $332 million and US $71 million, respectively. If half the arable area under conventional farming shifted to organic practices, the total economic value of ES would be US $192 million and US $166 million annually for organic and conventional arable area, respectively. In this case, the non-market value of ES for the organic area was US $65 million and that of conventional area was US $35 million annually. This study demonstrated that arable farming provides a range of ES which can be measured using field experiments based on ecological principles by incorporating a ‘bottom-up’ approach. The work also showed that conventional New Zealand arable farming practices can severely reduce the financial contribution of some of these services in agriculture whereas organic agricultural practices enhance their economic value.     

A spatial taxonomy of broadband regions in the United States

The steady growth of broadband penetration in the United States is indicative of a major shift in advanced data services and last-mile infrastructure in the deregulated telecommunication environment. Although there are concerns with the equitable provision of broadband services in urban, rural and remote areas, the diffusion process has also created a unique landscape of broadband availability that reflects elements of competition, federal policy, local government initiatives, technological limitations and location. This paper explores the dynamic and diverse spatial landscape of broadband availability in the United States at the zip code level, for 2004. In addition, this study provides a multivariate, spatial taxonomy of broadband regions, highlighting their socioeconomic and demographic differences.     

Trade and the governance of ecosystem services

We work with a basic general equilibrium model of an economy with an industrial good and a rural good. Industrial good production results in pollution that affects the provision of ecosystem services and thereby the production of the rural good. The assignment of ecosystem rights to the industrial polluters or to the rural pollutees results in differential transaction costs that affect production possibilities between the two goods. Ecosystem rights are assigned to maximize social welfare. Over time, technological change and differences in income superiority affect the choice of the assignment of rights. Opening to trade affects the choice of the assignment of ecosystem rights depending on the nature of technological change, but the relative income superiority of goods no longer affects the assignment of ecosystem rights in a small economy. Thus, among other findings, we demonstrate that the phenomena known as the environmental Kuznets curve does not hold for the protection of ecosystem services in production, or production externalities generally, because trade separates consumption from production.     

Profiting in the info-coms industry in the age of broadband: Lessons and new considerations

Who profits in the info-coms industry in the broadband age, and how? This paper looks at this question by considering broadband as quite a broad phenomenon, including both the most important focus in the current evolution of the Internet, high speed access, and the new services created. We focus on two key stylized facts: SF1: “R&D and patent licensing are increasingly high in this industry, but the initiators of innovations have greatly changed over time”, and SF2: “Small, facilities-less companies contributed to the development of the Internet industry, but have generally performed badly as the industry has matured and broadband use has become widespread”. The paper uses the approach developed by Teece (1986) which analyses strategies of integration, collaboration, licensing and public policy in the presence of technological innovation. These organizational strategies, in practice, are not all profitable and, as Teece correctly stressed as a general principle, their success appears to depend to a great extent on whether they are initiated by innovators or imitators, and how they are articulated within a) regimes of appropriability, b) dominant design issues, and c) complementary assets access. The paper analyses the robustness of Teece (1986), which over the last twenty years has greatly influenced research in economic organization and business strategy on the issue of profiting from innovation, in its ability to provide a framework appropriate to the changes that have occurred in the broadband industry. The paper draws some lessons, and provides some new considerations related to the robustness of Teece's framework. The framework appears robust on SF1: innovators globally have won, though some of them (the best innovators) were acquired by imitators. On SF2, again the innovators have won, but the only success strategy (vertical integration) was only attainable for the largest ISPs/IAPs. We conclude, therefore, that there are many lessons that can be drawn from Teece's framework, though further work should be done on two essential topics: deeper analysis of the sources of technology provision, and investigation of the role of firm heterogeneity.