The Diffusion of Broadband Telecommunications: The Role of Competition

Abstract

The paper addresses the determinants of diffusion of broadband infrastructure by looking a the US Federal States. It tries to identify in particular to what extent intra- and inter-platform competition contribute to accelerating the speed of diffusion. Panel data analysis results indicate that both types of competition significantly affect the the rate of diffusion, although with different effects. Intra-platform competition seems to have a positive impact only initially on the rate of diffusion, but then dissipates. For the longer term, inter-platform competition has a much more important role in driving the rate of diffusion. The study takes account of the impact of other variables measuring competition in the telecommunications sector as well.