Regulation, investment and efficiency in the transition to next generation broadband networks: Evidence from the European Union

• The impact of public policy on the quality of Internet connectivity.
• Determinants of broadband network performance between 2007 and 2012 in the EU.
• Countries with more service-based competition have relatively higher quality broadband networks.
• Third party access/interconnection obligations conducive to broadband infrastructure development.

This article explores the impact of public policy on technological change and the development of broadband infrastructure in EU member countries. The analysis explores contradictory findings in previous empirical literature on the interplay between regulation, competition, and investment, noting the importance of the construction of indicators employed to evaluate these interactions. Furthermore, the article points out that the traditional policy model and related empirical literature treat fixed capital inputs in networks as a measure of broadband infrastructure quality. However, relatively higher capital inputs do not necessarily translate into the development of relatively higher quality broadband networks. Using broadband network performance measurements between 2007 and 2012, the article addresses this contradiction in the literature and evaluates the determinants of broadband infrastructure quality in the EU. The analysis suggests countries that have been more effective at promoting entry and competition in the provision of Internet access services have developed relatively higher quality broadband networks.