Transparency regulation in broadband markets: Lessons from experimental research

This article presents a research project in experimental law and economics about transparency regulation in markets for experience goods, with implications for the implementation of transparency requirements in broadband markets. European and American regulators have introduced transparency policies in the broadband sector, although their effects on market actors are not fully understood. The experiment evaluates the effects of increased transparency on various market outcomes. Four scenarios are compared in which end-users have different amounts of information about quality. Findings of this research suggest that (1) more information about quality leads to higher total surplus and higher consumer surplus; (2) quality provided by firms increases with the level of transparency; and (3) quality and efficiency are marginally higher when full information about quality is only available to some consumers, than when all consumers have imperfect information about quality. To these findings a number of conclusions are attached relevant for broadband policy.     

Sequencing in telecommunications reform: A review of the Turkish case

This paper reviews the Turkish case of telecommunications reform with reference to the evidence from the sequencing literature. Turkey’s progress is in line with the proper sequencing of reform suggested by the literature. Accordingly, Turkey has pursued a gradualist approach by restructuring its public utility, the Posts, Telegraph and Telephone Company, and creating Turk Telecom in 1994; establishing the sector regulator, the Turkish Telecommunications Authority, in 2000; and liberalising the sector in 2003 before selling 55% of Turk Telecom to Oger Telecom, a private company, in 2005. Although the proper sequencing of reform was implemented, the Turkish telecommunications sector has not been functioning satisfactorily as yet, as indicated in the recent progress report of the European Union about Turkey’s accession and as revealed by the performance indicators analysed in this paper. The prevailing information, incentive and commitment problems require a close cooperation by the government with the regulators so as to ensure and reinforce the autonomy of the Telecommunications Authority and to establish a more transparent decision-making process.     

ICT platforms and regulatory concerns in Europe

The rise of platforms in ICT markets invites a reappraisal of regulatory frameworks and practices. As platforms originating in entirely different sectors increasingly compete directly against each other, regulators ought to address platform competition issues regardless of their sector of origin, and taking into account the specificities of two-sided or multi-sided market business models. This paper identifies different types of such business models in ICT markets. It offers an exploration of a number of specific concerns that may arise related to specific platform types, and points at a number of instruments available to regulators to address these concerns.     

Different paths to universal access: The impact of policy and regulation on broadband diffusion in the developed and developing worlds

The authors examine the broadband digital divide by analyzing the impact of policy and regulation on broadband Internet diffusion. Their multiple regression analysis shows factors that determine broadband diffusion in technologically developed countries do not necessarily have the same impact in less developed countries. They show that in technologically developed countries, there is greater broadband diffusion in countries that make a higher financial investment in information and communication technologies (ICTs), have effective governing practices at the national level, have higher levels of education, and are more urban. In technologically developing nations, a competitive telecommunications sector and higher investment in ICTs lead to greater broadband diffusion, with investment having an even larger impact in the developing world than in the developed world. In addition, stronger democratic political institutions, higher levels of national income and lower levels of income inequality increase diffusion, but the presence of a national telecommunications regulatory authority has a negative impact. These results suggest that the path to widespread availability and use of broadband requires different strategies depending on a nation's level of technological development.     

Reform of telecommunications regulation in Japan and Canada

Despite demographic and political differences, Japan and Canada face many similar challenges in the development of new telecommunications policy. These include interbureaucratic conflict, reorganization initiatives by the telcos and policy development by non-elected officials. Differences include the nature of policy change, the role of economic considerations and decision-making processes. This comparative analysis concludes by suggesting that each country may learn useful lessons with respect to public involvement, local rates, local measured service and the process of regulatory change.     

Telecommunications in Canada: The regulatory crisis

The article highlights the need for a national dimension in Canada's telecommunications systems. But the national dimension is undermined by the country's haphazard regulatory structure, and the consequent barriers to fair and equitable access to telecommunications services. A solution is proposed in the form of a national regulatory body which, without constitutional rearrangement, would yield effective federal authority and simultaneously ensure that valid concerns of a local or intraprovincial nature are taken into account.     

Regulation and efficiency in transition: The case of telecommunications in Italy

In regulating the telecommunications industry, the separation between network and retail functions, which is designed to countervail the market power of incumbent operators, is a relevant issue. Despite its importance, little empirical research has addressed the effects of such a separation. Accordingly, this paper provides insights into the consequences of the Italian communications regulatory authority's (AgCom) decision to impose this type of separation on the incumbent telecommunications operator, Telecom Italia. In particular, the studied separation is between the firm's network-related functions, and those used for provision of its communication services. The present research finds that the type of separation implemented by AgCom allows a provider to maintain the advantages of operational scale in its network structure without dampening competition in the existing market for communications services. The study also offers further empirical evidence on the advantages of a composite vs. translog function in analyzing the multiproduct cost structure of a telecommunications operator.     

The interplay of regulation and other drivers of NGN deployment: A real-world perspective

This paper contributes to the current, lively debate on which factors induce or hinder the deployment of next generation networks (NGNs), where regulatory design plays the key role. As a country with one of the highest levels of fibre deployment, intense infrastructural competition in urban areas and regulated access to both copper and fibre networks, Slovenia is an interesting case to explore using the recent theoretical and empirical findings. First, the impacts of regulation and other factors on investment decisions are explored. Second, the impact of NGN investments on investors' performance is analysed and explained, and we focus on both the investors' business strategies and the demand for NGN services. Third, the regulatory policy in both regimes, namely, before and after the mandated access to fibre was implemented, is discussed and changes are proposed.     

Low price equilibrium in multi-unit auctions: the GSM spectrum auction in Germany

The second–generation (GSM) spectrum auction in Germany is probably the most clear cut example of a low price outcome in a simultaneous ascending-bid multi-unit auction. The present paper gives an account of the events, describes the auction rules and market conditions, and provides a game theoretic explanation of low price equilibrium in simultaneous, ascending-bid multi-unit auctions. In particular, it is shown that in the unique equilibrium that survives iterated elimination of dominated strategies, the efficient allocation is reached at minimum bids.     

Objectives, topics and methods in industrial organization during the nineties: Results from a survey

We conducted a survey among 114 experts on industrial organization regarding their opinions on the way markets work, on the proper role of competition and industrial policy, and on the methods which should be used to analyse industrial markets. The experts assessed the importance of research topics and methods during the last year and their probable development in the future. The sample appears to provide a valid representation of European experts, the response pattern does not seem to depend on the personal characteristics of the respondents.     

Wholesale market definition in telecommunications: The issue of wholesale broadband access

The scope of a wholesale market may, in addition to demand- and supply-side substitution at the wholesale level, also be determined by substitution patterns at the retail level. Considering wholesale broadband access markets, it is argued that each of these forces can be strong enough to render a 5–10% price increase by a hypothetical monopolist at the wholesale level unprofitable and thus may lead to a wider wholesale market definition including, for example, cable networks in addition to DSL. Based on the theory of derived demand elasticities the paper discusses under which circumstances this could be the case. The position of the European Commission and the practice of national regulatory authorities are then reviewed in light of these arguments.     

Global competition and EEC policy in telecommunications: An Italian perspective

Within the framework of increasing US and Japanese competition, an interpretation is given of the future development lines of European telecommunications. Europe is lagging behind in this sector; this is explained in terms of the subdivision of services at the national level and the fragmentation of industrial areas within the respective countries. The minimum basis for recovery should be the establishment of a common European base in the telecommunications sector. A European scenario is proposed with particular attention devoted to the Italian problems in restructuring and development.     

Telecommunications interception in Australia: Recent trends and regulatory prospects

This article reviews recent trends and regulatory prospects relating to telecommunications interception in Australia. The steady expansion of surveillance powers in Australia over the past two decades, particularly at the federal level, is critically evaluated. Drawing comparisons with the United States, the article analyzes the strengths and weaknesses of the existing regulatory system for telecommunications interception, including legal safeguards such as judicial warrants and civil actions for unlawful interception. The authors conclude by sketching a new normative framework for telecommunications interception that repudiates the idea of “balancing” competing interests in favor of a regulatory model that promotes human rights and due process as paramount considerations.     

Implementing policy on next-generation broadband networks and implications for equity of access to high speed broadband: A case study of Australia's NBN

Next generation telecommunications infrastructure is expanding and supporting rapid growth of broadband technologies and a digital economy. In this context, digital information and communications technologies (ICTs) are of increasing importance as a means for people to gain access to health or social services, employment opportunities, information and social networks. In this article we draw on our recent case study research to examine the policy (and politics) shaping implementation of Australia's National Broadband Network (NBN) and its likely effects on equity of access to high speed broadband (HSB) services. We monitored NBN policy and implementation from 2015 to 2018 through policy documents, reports, and media. To assess likely effects of NBN policy on implementation and subsequently on equity of access to HSB we: a) applied a framework defining four elements of equity of access; and b) analysed stakeholder views drawn from media articles and 22 interviews with experts on NBN policy including politicians, government staff, and industry representatives. We found that equity considerations competed with political and commercial imperatives during the rollout of the NBN. This resulted in positive and negative consequences for equity of access to HSB, with a change in policy and implementation in 2013 bringing greater risks to equity of access. The case study provides a framework for considering equity in the implementation of next generation telecommunications infrastructure and highlights the importance of considering equity in the evaluation of telecommunications infrastructure.     

Representing markets: The shaping of fashion trends by French and Italian fabric companies

In this paper, we use ethnographic methods to describe the market making activities of Première Vision, Paris, the leading trade fair in the clothing fabric industry. Through collective action and powerful representational practices, Première Vision's exhibitors affirm their style innovation and position themselves as trend setters. Our study extends the emerging literature on market forms and marketing practices by (i) introducing a different lens, based on the ideas of postmodern theorists, through which the nature of representation in industrial markets may be viewed and (ii) addressing the role of self-interested theorists, i.e. marketers who theorize about the market and its functioning in ways that are self-beneficial. Our paper also has implications for trade fair literature, which is mostly concerned with individual exhibitors' value appropriation strategies. The case of Première Vision shows that trade fairs may be considered as collective marketing instruments, thus highlighting the importance of organizers' value creation strategies.     

Market power,regulatory convergence,and the role of data in digital markets

The increased economic importance of digital services has profoundly changed the power structure in telecommunications and media markets. Although these services sometimes directly compete with traditional telecommunications services, the regulatory obligations for both players differ significantly. This article discusses three important areas deemed relevant in order to define a coherent regulatory framework and to account for the specific peculiarities of digital markets: First, challenges associated with assessing market power in digital markets. Second, challenges in harmonizing different regulatory obligations for digital services, and third, the vital role of data and data protection in the context of data-driven business models.     

The transition from product to service in business markets: An agenda for academic inquiry

In recent years, industrial manufacturers around the world have deployed growing efforts in developing services in addition to their traditional product business in order to secure long-term growth and to remain competitive in the marketplace. Against this background, the present article introduces the reader to this special issue. It first recalls key aspects of the emerging service-dominant logic of marketing and examines how it relates to the business marketing field. It then illustrates the challenges faced by top executives of industrial companies in the transition from a product-centric to a service-centric business perspective through an interview with the managing director of ThyssenKrupp Service AG. After discussing how the articles included in this special issue advance the extant literature on industrial services marketing, the article finally develops a number of directions for future research on services in business markets.     

Public policy targets in EU broadband markets: The role of technological neutrality

The European Commission has recently sought to substantially revise how it regulates the telecommunication industry, with a key goal being to incentivise investment in high-speed broadband networks. Ambitious goals to incentivise investment in high-speed broadband networks have been set across the European Union, initially in the ‘Digital Agenda for Europe’ and more recently in its ‘Gigabit strategy’. These goals reflect the view of many that there are widespread and significant socio-economic benefits associated with broadband. Our analysis explores the consequence of target setting at a European level, in terms of encouraging investment and picking which technology should be adopted within the context of technological neutrality. We demonstrate that while public policy targets might implicitly favour specific technologies, especially when gigabit targets are defined, the technological choices that occur within individual Member States are shaped by the complex and dynamic interaction between a series of path dependencies that may vary significantly across as well as within Member States. Adopting an ecosystem perspective, we propose a conceptual framework that identifies the key factors associated with technological neutrality and informs a rational decision-making process.     

The welfare effects of mobile termination rate regulation in asymmetric oligopolies: The case of Spain

This paper examines the effects of mobile termination rate regulation in asymmetric oligopolies. It extends existing models of asymmetric duopoly and symmetric oligopoly where consumer expectations about market shares are passive. First, demand and product differentiation parameters are calibrated using detailed data from the Spanish market from 2010. Next, equilibrium outcomes and welfare effects under alternative scenarios of future termination rates are predicted. Lowering termination rates typically lowers profits of all networks and improves consumer and total surplus.