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Unbundling the incumbent: Evidence from UK broadband

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Title: Unbundling the incumbent: Evidence from UK broadband
Authors: Valletti, T
Nardotto, M
Verboven, F
Item Type: Journal Article
Abstract: We consider the impact of a regulatory process forcing an incumbent telecom operator to make its local broadband network available to other companies (local loop unbundling, or LLU). Entrants are then able to upgrade their individual lines and offer Internet services directly to customers. Employing a very detailed data set covering the whole of the United Kingdom, we find that, over the course of time, many entrants have begun to take advantage of unbundling. LLU entry only had a positive effect on broadband penetration in the early years, and no longer in the recent years as the market reached maturity. In contrast, LLU entry continues to have a positive impact on the quality of the service provided, as entrants differentiate their products upwards compared to the incumbent. We also assess the impact of competition from an alternative form of technology (cable) which is not subject to regulation, and what we discover is that inter-platform competition has a positive impact on both penetration and quality.
Issue Date: 1-Apr-2015
Date of Acceptance: 1-Apr-2015
URI: http://hdl.handle.net/10044/1/20088
DOI: 10.1111/jeea.12127
ISSN: 1542-4774
Publisher: Wiley
Start Page: 330
End Page: 362
Journal / Book Title: Journal of the European Economic Association
Volume: 13
Issue: 2
Copyright Statement: © 2015 The Authors. Journal of the European Economic Association published by John Wiley & Sons, Ltd. on behalf of European Economic Association. This is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribution and reproduction in any medium, provided the original work is properly cited.
Keywords: Social Sciences
Economics
Business & Economics
D22
K23
L43
L51
L96
EMPIRICAL-EVIDENCE
COMPETITION
ACCESS
ENTRY
INFRASTRUCTURE
INVESTMENT
14 Economics
Economics
Publication Status: Published
Online Publication Date: 2015-05-01
Appears in Collections:Imperial College Business School



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