Infrastructure sharing as an opportunity to promote competition in local access networks

Telecom infrastructures are facing unprecedented challenges, with increasing demands on network capacity. Today, network operators must determine how to expand the existing access network infrastructure into networks capable of satisfying the user’s requirements. Thus, in this context, providers need to identify the technological solutions that enable them to profitably serve customers and support future needs. However, the identification of the “best” solution is a difficult task. Although the cost of bandwidth in the active layer has reduced significantly (and continually) in recent years, the cost of the civil works—such as digging and trenching—represents a major barrier for operators to deploy NGA infrastructure. Duct is a critical part of the next-generation access networks, and its sharing would reduce or eliminate this capital cost and this barrier to entry. The aim of this paper is to provide a better understanding of the economics of broadband access networks technologies (wireline and wireless), their role in the deployment of several services in different regions, and the development of competition in the access networks

Mandatory Unbundling and Irreversible Investment in Telecom Networks

This paper addresses the impact on investment incentives of the network sharing arrangements mandated by the Telecommunications Act of 1996, with a focus on the implications of irreversible investment. Although the goal is to promote competition, the sharing rules now in place reduce incentives to build new networks or upgrade existing ones. Such investments are irreversible -- they involve sunk costs. The basic framework adopted by regulators allows entrants to utilize such facilities at prices reflecting what it would cost a new, efficient, large-scale network to be built. Such sharing opportunities are extensive, covering virtually the entire suite of network services provided, and extremely flexible, as the entrant can rent facilities in small increments for short duration, with no long-term contracts required. Because the entrant does not bear the sunk costs, this leads to an asymmetric allocation of risk and return that is not properly accounted for in the pricing of network services, which creates a significant investment disincentive.

Competition via investment,an efficient model for FTTH roll-out

The debate on the regulation of Next General Access started in Europe several years ago. It addresses the question of whether or not fibre access networks should be subject to the same regulation as the copper local loop. This debate is often examined as competition vs. investment. The present paper suggests that the best way for regulation to solve the dilemma is to promote competition through competitive investments in the fibre access market. In particular a combination of individual and co-investment from/among competing fibre operators could provide the desired outcome in terms of efficient investment, coverage, competition, innovation and prices/cost. Such an option corresponds to the choice of several European national regulators. It is also the the historical and highly successful option used in European mobile markets.NGA, FTTH, Regulation, Competition, Dynamic and Static Efficiency.

Peculiarities in the Development of Special Economic Zones and Industrial Parks in Russia

open access journalThis paper investigates the process of developing and implementing Special Economic Zones (SEZs) and industrial parks in Russia. Governments commonly use SEZ policies to develop and diversify exports, create jobs, and launch technology and knowledge sharing. The industrial cluster concept is based on the significance of rivalry and supplier networks within the cluster, the combination of geographical specificities and government policies that lead to innovation and productivity growth. This study reveals that, in Russia, the government’s approach in developing these initiatives has strongly interfered with business activities and prevented the vital competitive and collaborative behavior of firms within these economic zones

Mobile Communications Industry Scenarios and Strategic Implications for Network Equipment Vendors

Mobile infrastructure markets have changed dramatically during the past years. The industry is experiencing a shift from traditional large-scale, hardware-driven system roll-outs to software and services -driven business models. Also, the telecommunications and internet worlds are colliding in both mobile infrastructure and services domains requiring established network equipment vendors and mobile operators to transform and adapt to the new business environment. This paper utilizes Schoemaker's scenario planning process to reveal critical uncertain elements shaping the future of the industry. Four possible scenarios representing different value systems between industry's key stakeholders are created. After this, five strategic options with differing risk and cost factors for established network equipment vendors are discussed in order to aid firm's strategic planning process. --

More than Money: The potential of cross-sector relationships

Collaboration and co-funding between foundations has seen strong and consistent development. However, less has been done to explore and document the opportunities that collaboration across sectors between foundations, public and private sector funders may provide. 'More Than Money' provides a valuable insight into what it means for funders from different sectors to work collaboratively. Examples include the Pears Foundation working with the Department for Children, Schools and Families to turn a school linking project from a small pilot to a national project, or the development of the Evaluation Support Scotland project which began through informal discussions between a small group of funders from the statutory and voluntary sector, and continued to develop through funding from the Scottish Executive.We hope that this publication will help inform and encourage funders from all sectors as they continue to explore the exciting opportunities that cross sector collaboration can offer

Irrational Expectations: Can a Regulator Credibly Commit to Removing an Unbundling Obligation?

There is a large empirical literature that investigates the effects of unbundling requirements on broadband operators' incentives to invest in infrastructure. To date, that literature has generally relied on industry-wide data as an indicator of how the representative operator reacts to the imposition of mandatory unbundling. In this paper, we present original findings on how specific firms reacted to the removal of an unbundling obligation that is, an act of "regulatory forbearance"either for an existing access technology or for a new access technology. We rely on three case studies to evaluate the impact of regulatory forbearance on specific incumbents and entrants that were directly affected by the regulator's decision. Our findings from the first case study appear to undermine the so-called "stepping stone" justification for unbundling an existing access technology (for example, the copper loop). In particular, there is a large discontinuity in the investment by entrants around the date of forbearance, in contrast to the steady movement up the ladder of investment predicted by the stepping stone hypothesis. Such a discontinuity suggests that either (1) the regulator failed to signal its deregulatory intentions to entrants, or (2) that the signal was clear but the entrant did not react according to the theory. We also find that incumbent investment increases significantly in response to forbearance from regulating a new access technology (for example, fiber loops). When forbearing from regulating an existing access technology, regulators can signal their future intentions to entrants by slowly increasing the regulated wholesale rate. In the case of forbearing from regulating a new technology, however, there is no equivalent mechanism by which regulators can signal their deregulatory intentions to incumbents. Because a regulator cannot credibly signal its commitment to industry participants, and because such a commitment is critical to the practical success of the stepping stone theory, the best policy for maximizing investment is to accelerate the date of forbearance for existing and new access technologies.Technology and Industry

Building consensus on Internet access at the Internet Governance Forum (IGF)

This paper identifies and documents the main areas of discussions and 'recommendations' that were generated under the Access theme at the second Internet Governance Forum in Rio De Janeiro, November 2007. Whilst recognising that the IGF is currently viewed and operates primarily as a space for discussion, the paper finds that (specifically in the case of Access) it is also a space in which commonality of opinion occurs to the level at which 'recommendations' can be made and repeatedly asserted independently/individually in the workshops, and strategically reinforced at different levels of the IGF. The Internet Governance Forum (IGF) is a space for multi-stakeholder policy dialogue, set up in 2006 as a direct response to the deliberations of the World Summit on the Information Society (WSIS). The forum was created to (amongst other things) discuss public policy issues related to key elements of internet governance in order to foster the sustainability, robustness, security, stability and development of the internet. Its structure, function and working are addressed in paragraphs 73 to 79 of the WSIS Tunis Agenda