nep-ict New Economics Papers
on Information and Communication Technologies
Issue of 2017‒09‒24
eight papers chosen by
Walter Frisch
Universität Wien

  1. Bundling, consumer retention and entry: evidence from fixed broadband market By Grzybowski, Lukasz; Liang, Julienne; Zulehner, Christine
  2. Impact of Very High-Speed Broadband on Local Economic Growth: Empirical Evidence By Hasbi, Maude
  3. Competition and vertical/agglomeration effects in media mergers: bagging bundle benefits By Howell, Bronwyn E; Potgieter, Petrus H.
  4. A Generalized Email Classification System for Workflow Analysis By Piyanuch Chaipornkaew; Takorn Prexawanprasut; Chia-Lin Chang; Michael McAleer
  5. The Effects of the Internet and Mobile Services on Urban Household Expenditures By Zhang, Aihua; Lv, Jia; Kong, Ying
  6. Role of the Regional economic communities (RECs) in Information and Communication Technologies (ICT) in the Asia-Pacific By Loan, Ngo Thi Thanh; Mitomo, Hitoshi
  7. The Mixed Blessing in Subsidized Internet Access By Frieden, Rob
  8. Provision of Personal Information and the Willingness-to-Pay for Receiving Critical Information in Time of an Unprecedented Disaster By Sakurai, Naoko; Otsuka, Tokio; Mitomo, Hitoshi

  1. By: Grzybowski, Lukasz; Liang, Julienne; Zulehner, Christine
    Abstract: This paper answers two empirical questions. First, we analyze how fixed-mobile (quadruple-play) bundling impacts retention of consumers in fixed broadband market. Second, we assess how bundling by the incumbent operator impacts the market share and number of entrants who provide broadband services using incumbent's infrastructure. To address these questions we use a complete database of about 9.5 million subscribers to incumbent fixed broadband operator in a European country between March 2014 and February 2015. This data is combined with information on the market share and number of entrants in about 36,000 municipalities in this country. We find that consumers who bundle fixed and mobile services from the same provider are less likely to churn. Without quadruple-play bundling the annual retention of fixed broadband consumers would increase from 8.4% to 9.2%. Next, we find that the share of consumers having quadruple-play bundles with the incumbent has a negative impact on the market share and number of entrants. In the absence of quadruple- play bundling, the market share of entrants would be higher by about 6.8 percentage points. Quadruple-play bundling has also negative impact on the number of LLU entrants, which is bigger in the case of small LLU operators who cannot provide bundled offers themselves. This suggests that firms which cannot sell fixed-mobile bundles are disadvantaged in competition.
    Keywords: Quadruple-play,Bundling,Consumer retention,Market entry
    JEL: L13 L50 L96
    Date: 2017
  2. By: Hasbi, Maude
    Abstract: I estimate the impact of very high-speed broadband networks on some measures of local economic growth in France. I use panel data estimations with time- and municipal-fixed effects. I show that municipalities with a very high-speed broadband network tend to be more attractive for companies. I find a positive impact on the number of companies of all non-farm market sectors operating locally, along with a positive impact on company creation. In addition, municipalities with a very high-speed broadband network provide a more favorable environment for entrepreneurship, as it has a positive effect on the creation of sole proprietorships. The estimation results also show a positive impact on unemployment reduction.
    Keywords: Fiber,Very High-Speed Broadband,Local Economic Growth,Company Creation
    JEL: L13 L50 L96
    Date: 2017
  3. By: Howell, Bronwyn E; Potgieter, Petrus H.
    Abstract: Existing frameworks (such as used by the New Zealand Commerce Commission in its recent evaluation of the proposed merger between Sky Television and Vodafone) require, as a first step, the definition of the relevant markets affected by the merger or vertical integration activity. Historic precedents in the telecommunications sector have tended towards finding that vertical agglomeration effects when network operators integrate downstream into the provision of applications and services to end-consumers are harmful to competition. Such Structure-Conduct-Performance methods of evaluating mergers and other aspects of market performance are problematic when the firm(s) concerned supply many different products, both together in various different bundle forms and separately as individual components. Defining the markets for (merger) analysis on the basis of only one of the components in a possible bundle that the (merged) firm may supply risks overlooking the complex interactions that occur on the demand side when consumers make their purchase decisions. This is especially likely to be an issue in the supply of internet applications and content bundled with broadband internet access. Consumers have heterogeneous preferences for different applications and content (hereafter ‘content’), and will purchase (or access) many different content types. Even though ownership of rights to distribute one content may confer a degree of market power in for the owner-provider over those consumers with very strong preferences for this content over all others, it is not axiomatic that the firm will be able to exert this power over consumers whose preferences are more evenly distributed. The more variety there is in the content bundles available, and the more heterogeneous are consumers’ preferences across the various content types, the greater is the number of possible markets in which interaction is likely to occur and the more problematic it becomes to identify the relevant markets for analysis of mergers and antitrust cases. We propose that classic merger and antitrust analysis based on econometric cost-benefit analysis can be augmented by using simulation and numerical analysis of a range of bundle offers expected to be relevant in decision-making. We develop a simple model and use it to demonstrate how this approach could have informed the recent New Zealand Commerce Commission decision about the proposed Sky-Vodafone merger by offering some quantitative estimates of total and consumer welfare and provider profits under the proposed factual (with bundling) and counterfactual (individual component sales) cases. The approach may also inform other analyses, such as the assessment of the effects of two-sided markets and firm pricing decisions.
    Date: 2017
  4. By: Piyanuch Chaipornkaew (College of Innovative Technology and Engineering Dhurakij Pundit UniversityBangkok, Thailand.); Takorn Prexawanprasut (College of Innovative Technology and Engineering Dhurakij Pundit University Bangkok, Thailand.); Chia-Lin Chang (Department of Applied Economics Department of FinanceNational Chung Hsing University Taichung, Taiwan.); Michael McAleer (Department of Quantitative Finance National Tsing Hua University, Taiwan and Econometric Institute Erasmus School of Economics Erasmus University Rotterdam, The Netherlands and Department of Quantitative Economics Complutense University of Madrid, Spain And Institute of Advanced Sciences Yokohama National University, Japan.)
    Abstract: One of the most powerful internet communication channels is email. As employees and their clients communicate primarily via email, much crucial business data is conveyed via email content. Where businesses are understandably concerned, they need a sophisticated workflow management system to manage their transactions. A workflow management system should also be able to classify any incoming emails into suitable categories. Previous research has implemented a system to categorize emails based on the words found in email messages. Two parameters affected the accuracy of the program, namely the number of words in a database compared with sample emails, and an acceptable percentage for classifying emails. As the volume of email has become larger and more sophisticated, this research classifies email messages into a larger number of categories and changes a parameter that affects the accuracy of the program. The first parameter, namely the number of words in a database compared with sample emails, remains unchanged, while the second parameter is changed from an acceptable percentage to the number of matching words. The empirical results suggest that the number of words in a database compared with sample emails is 11, and the number of matching words to categorize emails is 7. When these settings are applied to categorize 12,465 emails, the accuracy of this experiment is approximately 65.3%. The optimal number of words that yields high accuracy levels lies between 11 and 13, while the number of matching words lies between 6 and 8.
    Keywords: Email; business data; workflow management system; business transactions.
    JEL: J24 O31 O32 O33
    Date: 2017–07
  5. By: Zhang, Aihua; Lv, Jia; Kong, Ying
    Abstract: In recent years, the economy of China has entered a new normal state and the economic growth rate has decelerated. The telecommunications industry as a national strategic and basic industry, is also facing up with some dilemma. Information consumption is a comprehensive concept including e-commerce, communications, broadband services, online games and so on. On this basis, this paper employs the almost ideal demand system(AIDS) to explore the impact that information consumption has made to residential consumption expenditure and the change of the consumption structure. Ac-cording to empirical analysis, finally we can draw the following conclusions: The income elasticity of information consumption is greater than 1, which means the income demand is flexible. And the self-price elasticity of information consumption is negative and the absolute value is between 0 and 1. It means that the price of information consumption is not flexible.
    Keywords: Information consumption,Household consumption expenditure,The almost ideal demand system(AIDS),Demand elasticity Information consumption
    Date: 2017
  6. By: Loan, Ngo Thi Thanh; Mitomo, Hitoshi
    Abstract: In this article, we review Information and Communication Technologies (ICT) policymaking and regulation of the regional economic communities (RECs) in conjunction with their regional regulators’ associations (RRAs) in the region of Asia-Pacific.Undoubtedly, this regulatory structure has been drafted with a regional mindset: to promote the harmony among members and to form regional associations in hope of stimulating cross-border cooperation and market development. This paper focuses on the political and legal aspects of ICT regulatory policies, the development and the rising number of cooperation programs as well as the visions of RECs and RRAs in the Asia-Pacific. By employing the framework of regulatory regionalism, particularly on the idea that the policies can be conceptualized as a territorial political system taking place in the institutional space of the state, we explore different implementations of regional regulations on ICT that are essential to understand the dynamics of new mode of regional governance.
    Keywords: regional governance,regulatory regionalism,ICT policy & regulation
    Date: 2017
  7. By: Frieden, Rob
    Abstract: This article offers an unsponsored examination of current disputes whether national regulatory authorities (“NRAs”) should permit broadband carriers and content providers, such as Facebook, to subsidize broadband access to a limited, “walled garden” of content. The subsidy makes it possible for sponsored data access without debiting a monthly data allowance. Wireless subscribers, with service caps typically set at 1-5 Gigabytes allowed per month, can quickly exhaust their monthly allotment when streaming video content. Even so-called unlimited data plans in developed countries have monthly data thresholds that, if reached, trigger slower content delivery speeds and possibly degraded screen resolution of delivered video content. The article concludes that even though carriers and content providers serve profit maximizing goals in zero rating arrangements, the practice can have positive spillover effects including more access by impoverished users, stimulated interest in diversifying uses of wireless handsets and possible migration to broadband access options that equally support content consumption and creation. While carriers and content providers can migrate tentative, subsidized users into paying ones, zero rating also provides first time access opportunities, particularly for individuals least able to afford even extremely low cost access options available in many lesser developed countries. Additionally, zero rating can stimulate interest by consumers financially able to afford unsubsidized access, but heretofore uninterested in, or uninformed about the benefits. The article identifies ways for carriers and NRAs to limit subsidies in ways that accrue social benefits without creating an unlimited “free rider” opportunity for all wireless subscribers, regardless of ability to pay for service. The article suggests that carriers should offer zero rating opportunities on a conditional and promotional basis thereby making it more difficult for existing subscribers simply to use zero rating access as a way to avoid paying surcharges for exceeding data caps. While NRAs should not micro-manage carriers’ service pricing, establishing qualification rules for access to zero rating fits with other universal service initiatives that rely on well calibrated and targeted subsidies to simulate broadband service demand and supply.
    Date: 2017
  8. By: Sakurai, Naoko; Otsuka, Tokio; Mitomo, Hitoshi
    Abstract: Followingthe Great East Japan Earthquake, information and communications technology (ICT) is expected to play an important role in future pioneeringdisaster prevention programs and post-disaster reconstruction. The increase insmartphone users allows big data to be accumulated from such diverse sourcesaspersonal information posted on social networking services(SNS), location data, and communication histories. Japan is willing to promote the useof this big data forvarious business opportunities; however,people remain anxiousabout personal information being divulged.To use big data duringdisasters, it is important to conduct research and surveys focused on Internet users’perspectives. The purpose of this paper is to analyze internet users’ evaluation about providing personal information and to measure the willingness-to-pay (WTP) for receiving information services at the time of large-scale disasters. In order to quantify internet users’ evaluation about providing personal information, we drew up a questionnaire and conducted a survey. To obtain more accurate and practical estimation and evaluation, we adopted the Contingent Valuation Method (CVM). To identify the factors that impacted recipients’ WTP for providing personal information and to estimate the marginal contribution of each attribute to the value of WTP. We assessed the value of providing personal information at the time of large-scale disastersfor ordinary internet users quantitatively. In the case of location information, the average WTP was found to be JPY2,943. The estimated average WTP for the five cases ranged between JPY2,202 and JPY3,618, in which the highest amount was found to be for "Medical history" and the lowest for "Measurements." In order to identify the factors that impacted the respondents’ WTP, we estimated the marginal contribution of the 21 attributes to the value of WTP.
    Keywords: Unprecedented Disaster,Personal Information,CVM,WTP,Quantitative Assessment
    Date: 2017

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