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"All consumers can benefit from an open access policy in the broadband market": five questions to Mattia Nardotto

Interview of July 13, 2016

Mr. Nardotto, you investigated the market for broadband communication networks using data from UK broadband. The incumbent broadband providers have a strong market position because they own the network. What options do new entries have to compete?

Historically, the EU implemented regulation because the authorities were afraid that the incumbents could transfer their monopolistic power into the new rising broadband market. That’s why an open access policy was strongly advocated in the ‘90s when the broadband market was starting to develop in Europe. The two main options under Europe’s open access policy were bitstream and local loop unbundling (LLU). With bitstream, the incumbent continues to manage the connection and provide the service, and the investment from the entrant is minimal. It is similar to reselling. With LLU, you have a more facility-based competition and real access to the last mile. Access to broadband via LLU is a larger investment, because the entrant has to install machinery, run maintenance, and manage the flow of data in the local loop. [...]

The interview with Mattia Nardotto is published in DIW Economic Bulletin 28/2016 (PDF, 98.95 KB).

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