December 5, 2005

Do market failures hamper the perspectives of broadband?

Functioneren breedbandmarkt biedt geen reden voor beleidsintensivering

Press release
Mede dankzij het huidige beleid zijn er op dit moment in Nederland geen marktgebreken die bedrijven belemmeren te investeren in breedband. Concurrentie stimuleert de telecombedrijven voldoende. Het huidige beleid behoeft geen intensivering.

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As broadband telecommunication is seen as a source of productivity gains, the European Union and other regions are encouraging the deployment of a secure broadband infrastructure. In the Netherlands, there is some concern whether the supply of broadband capacity will meet the strongly increasing demand.

The main conclusions are that presently, given current broadband policy, no considerable market failures exist. Firms have adequate incentives to invest in broadband, partly induced by specific regulation of access to the local copper loop. Hence, there is no need for changes in current broadband policy. Market failures in terms of knowledge spillovers are taken care of by other policies.

As the broadband markets are very dynamic, unforeseen developments may emerge such as the appearance of new dominant techniques and market players. The best strategy for the government, in particular the competition authority, is to continuously monitor these markets, making timely intervention easier when needed.


Machiel van Dijk
J. Poort
Bert Minne
Machiel Mulder
Henry van der Wiel