Investment in Next Generation Networks and Wholesale Telecom Regulation
Debra Aron from LECG and Northwestern University and Dr. Robert Crandall of the Brookings Institution and Criterion Economics have co-authored a white paper with entitled “Investment in Next Generation Networks and Wholesale Telecommunications Regulation.” Focussed on the Canadian experience, the White Paper discusses economic evidence and international experiences regarding the effect of unbundling obligations applied to next generation networks on broadband outcome measures such as investment and penetration. “Canada’s policy makers can encourage efficient investment, innovation, and competition, and thereby promote economic welfare and prosperity in Canada, by establishing a clear policy against expanding the ILECs’ unbundling obligations to new broadband networks.”
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TABLE OF CONTENTS
Executive Summary
I. INTRODUCTION
II. CANADA LAGS BEHIND MANY OTHER COUNTRIES IN BROADBAND DEPLOYMENT
III. INVESTMENT IN BROADBAND TELECOMMUNICATIONS INFRASTRUCTURE IS CRUCIAL TO CANADA’S ECONOMIC ADVANCEMENT
a. Investment drives economic growth
b. Investment in information technology benefits the broader economy
c. Investment also leads to social welfare benefits by fueling platform competition
d. The Benefits of Broadband Investment Include Increased Availability of Healthcare, Educational, Governmental, Business, and Other Services
IV. EXPANDED UNBUNDLING OBLIGATIONS WOULD DISCOURAGE INVESTMENT IN NEW NETWORKS, THEREBY REDUCING SOCIAL WELFARE AND COMPETITION
a. Investment Funds Are Provided In Response To Profit Opportunities
b. Unbundling results in diminished control of one’s assets, which undermines investment incentives
c. Regulated prices cannot be assured to establish efficient investment incentives
d. The risk of information technology investment is greater now than in the past
e. Incentives for cable companies to invest and compete would be depressed by unbundling rules on ILECs
f. CLEC investment in broadband would be dampened by expanding unbundling obligations on ILECs
V. REGULATION OF NEXT GENERATION NETWORKS IN OTHER COUNTRIES
a. The United States
b. The European Union
c. Japan
d. Australia and New Zealand
e. Summary of the lessons of regulation of NGNs in other countries
VI. CONCLUSIONS
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