April 8, 2009

Unbundling inconsistent with investment in next-generation broadband, new data show

DSL unbundling is negatively correlated with new fiber investment, according to new research by TPI Vice President for Research and Senior Fellow Scott Wallsten.  Similarly, platform competition (cable and facilities-based DSL providers) is positively correlated with fiber deployment.  Wallsten’s paper uses a new dataset to examine empirically the effects of unbundling on investment in new fiber networks in Europe. Wallsten also examines unbundling in the context of the net neutrality debate outside the U.S., particularly in the EU.  Most European countries have endorsed the idea of net neutrality and believe that unbundling—mandatory network sharing—will ensure neutral networks. Wallsten argues, however, that unbundling may not necessarily affect incumbent incentives to prioritize certain traffic and, thus, may be less relevant to the net neutrality debate than many believe.

The Technology Policy Institute