nep-reg New Economics Papers
on Regulation
Issue of 2017‒07‒30
eight papers chosen by
Natalia Fabra
Universidad Carlos III de Madrid

  1. The European electronic communications code: A critical appraisal with a focus on incentivizing investment in next generation broadband networks By Briglauer, Wolfgang; Cambini, Carlo; Fetzer, Thomas; Hüschelrath, Kai
  2. Speeding up the internet: Regulation and investment in European fiber optic infrastructure By Briglauer, Wolfgang; Cambini, Carlo; Grajek, Michał
  3. Influence of Renewable Energy Sources on Electricity Transmission Networks in Central Europe By Karel Janda; Jan Malek; Lukas Recka
  4. Giant and dwarf - China's two faces in wind energy innovation By Gandenberger, Carsten
  5. Fiber deployment in Spain By Joan Calzada; Begoña García-Mariñoso; Jordi Ribé; Rafael Rubio-Campillo; David Suarez
  6. Identifying the Effect of Mobile Operating Systems on the Mobile Services Market By Toshifumi Kuroda; Teppei Koguchi; Takanori Ida
  7. Electricity supply reliability and households decision to connect to the grid By Arnaud MILLIEN
  8. Dynamic Fuel Price Pass-Through : Evidence from a New Global Retail Fuel Price Database By Chadi ABDALLAH; Roland Kangni KPODAR

  1. By: Briglauer, Wolfgang; Cambini, Carlo; Fetzer, Thomas; Hüschelrath, Kai
    Abstract: In September 2016, the European Commission (EC) published its proposal for a directive establishing the European Electronic Communications Code (EECC) - with one key aim being the provision of sufficient incentives for infrastructure investments into high-speed communication networks. Based on a detailed review of the theoretical and empirical literature of the most relevant regulatory measures - that is, co-investment models as well as different types of access regulation - we provide a critical appraisal of the respective provisionsin the EECC. We find that, although the EECC can generally be seen as step into the right direction, the expected effects on investment incentives as well as substantial implementation challenges in combination with a high degree of complexity of the envisaged measures contain substantial potential for improvement.
    Keywords: Telecoms' Review,Regulatory Framework,European Union,Investment,Infrastructure,Next Generation Networks,Broadband,Access Regulation,Co-Investment
    JEL: L96 L51
    Date: 2017
  2. By: Briglauer, Wolfgang; Cambini, Carlo; Grajek, Michał
    Abstract: In this paper we study how the coexistence of access regulations for legacy (copper)and fiber networks shapes the incentives to invest in network infrastructure. To this end, we develop a theoretical model explaining investment incentives by incumbent telecom operators and heterogeneous entrants and test its main predictions using panel data from 27 EU member states over the last decade. Our theoretical model extends the existing literature by, among other things, allowing for heterogeneous entrants in internet access markets, as we consider both other telecom and cable TV operators as entrants. In the empirical part, we use a novel data set including information on physical fiber network investments, legacy network access regulation and recently imposed fiber access regulations. Our main finding is that more stringent access regulations for both the legacy and the fiber networks harm investments by incumbent telecom operators, but, in line with our theoretical model, do not affect cable TV operators.
    Keywords: Internet access market,Access regulation,Investment,Infrastructure,Next Generation Networks,Broadband,Telecoms,Cable operators and Europe
    JEL: L96 L51
    Date: 2017
  3. By: Karel Janda (Institute of Economic Studies, Faculty of Social Sciences, Charles University in Prague, Smetanovo nabrezi 6, 111 01 Prague 1, Czech Republic; Department of Banking and Insurance, Faculty of Finance and Accounting, University of Economics, Namesti Winstona Churchilla 4, 13067 Prague, Czech Republic); Jan Malek (Universiteit van Amsterdam, Amsterdam); Lukas Recka (Institute of Economic Studies, Faculty of Social Sciences, Charles University in Prague, Smetanovo nabrezi 6, 111 01 Prague 1, Czech Republic)
    Abstract: This paper focuses on the influence of increased wind and solar power production on the transmission networks in Central Europe. The model ELMOD is employed. Two development scenarios for the year 2025 are evaluated on the basis of four representative weeks. The first scenario focuses on the effect of Energiewende on the transmission networks, the second one drops out nuclear phase-out and thus assesses isolated effect of increased feed-in. The results indicate that higher feed-in of solar and wind power increases the exchange balance and total transport of electricity between transmission system operator areas as well as the average load of lines and volatility of flows. Solar power is identified as a key contributor to the volatility increase, wind power is identified as a key loop-flow contributor. Eventually, it is concluded that German nuclear phase-out does not significantly exacerbate mentioned problems.
    Keywords: Energiewende, RES, transmission networks, congestion, loop flows, ELMOD, Central Europe
    JEL: L94 Q21 Q48 C61
    Date: 2017–02
  4. By: Gandenberger, Carsten
    Abstract: A functional analysis of the TIS for wind energy in China has revealed a great disparity in performance with respect to different functions of innovation. A particular strength of the Chinese TIS is the rapid diffusion of wind power equipment which presupposes the development of domestic production capabilities, the successful adoption of existing technology, the creation of markets and legitimacy as well as the ability to mobilize financial resources. Furthermore, Chinese universities and research institutes have quickly expanded their capabilities in the area of basic research. In contrast, China's performance in the area of applied research is mixed. Although the growth in the number of transnational and domestic wind energy patents indicates that China is now among the most inventive countries in the world, a more detailed analysis suggests that inventions are less focused on the most relevant technology subfields and that Chinese firms are reluctant to engage in innovation. The most prominent drawback of the centralized planning approach in China are governance deficits relating to the integration of wind energy into China's electricity grid as well as to the lack of complementary infrastructure for energy transmission and storage. These deficits result in high curtailment rates, low incentives for quality oriented innovation, and a low overall efficiency of wind energy in China.
    Keywords: Technological Innovation System,Functions of Innovation,China,Wind Energy
    Date: 2017
  5. By: Joan Calzada (Universitat de Barcelona); Begoña García-Mariñoso (Comisión Nacional de los Mercados y la Competencia); Jordi Ribé (Comisión Nacional de los Mercados y la Competencia); Rafael Rubio-Campillo (Comisión Nacional de los Mercados y la Competencia); David Suarez (Comisión Nacional de los Mercados y la Competencia)
    Abstract: Next generation access networks will be critical for future economic growth and access to these infrastructures will have major consequences for territorial and social cohesion. This paper examines the economic and regulatory determinants that serve as incentives for operators to invest in fiber-to-the-home technology. We draw on a dataset comprising 6,063 Spanish municipalities with access to broadband services to examine the incumbents’ (Telefónica) deployment of fiber in the period 2010-13. We show that local loop unbundling competition had a strong positive impact on Telefónica’s fiber deployment, while bitstream competition had a negative effect. Moreover, the incumbent was more likely to invest in municipalities with a large presence of cable operators. We also consider how the municipalities’ sociodemographic characteristics affected the operator’s deployment decision. While market size and population density had a positive effect on investment, the level of unemployment and the percentage of elderly population had a negative impact.
    Keywords: Fiber, Broadband, Competition, Regulation, Telecommunications, Municipalities.
    JEL: L12 L13 L51 L52 L96
    Date: 2017
  6. By: Toshifumi Kuroda; Teppei Koguchi; Takanori Ida
    Abstract: Modern economic theory predicts that tying can serve as a tool for leveraging market power. In line with this economic theory, competition authorities regulate the tying of Microsoft Windows with its Media Player or Internet browser in the EU and Japan. The authorities also take note of the market power of mobile handset operating systems (OSs) over competition in the app and services markets. However, no empirical evidence has thus far been presented on the success of government intervention in the Microsoft case. To assess the effectiveness of government intervention on mobile handset OSs, we identify the extent to which complementarity and consumer preferences affect the correlation between mobile handset OSs and mobile service app markets (mail, search, and map). We find significant positive complementarity between the mail, search, and map services, and mobile handset OSs. However, the elasticities of the mobile handset OS–mobile service correlations are rather small. We conclude that taking action to restrict mobile handset OSs is less effective than acting on mobile services market directly.
    Keywords: Mobile phone, Handset, Internet service, Platform competition
    JEL: L12 L43 L96
    Date: 2017–07
  7. By: Arnaud MILLIEN
    Abstract: The 7th Sustainable Development Goal aims to "ensure access to affordable, reliable, sustainable and modern energy for all". Because the cost to increase electrical capacity in Africa alonehas been estimated at $800bn, this article investigates the extent to which electricity reliability could contribute to a reduction in the marginal cost of grid extension by attracting more customers. Using lightning as an instrument for outages severity, the article evaluates the assumption that less uncertainty about electricity availability would lead to a larger number of connected households.The article finds that a one percentage point increase in electricity reliability would yield a 0.67 percentage point increase in connections. Therefore, delivering fully reliable electrical power would allow an electricity company to achieve its targeted growth of customer base 15 months earlier than planned.The effect of reliability is highest for middle-rich households, which are the most reluctant to subscribe in the presence of total, severe or partial outages. A one-percentage-point upgrade in reliability increase the likelihood that these households will be connected by 1.28 percentage points.This article also finds that households are more sensitive to outages in areas where outages are less frequent. In addition, the impact of reliability on households decision to connect could be at least 5% greater than the effect of poverty ; if the frequency of outages is too high, the wealth or poverty effect might vanish and households would respond only to the excessively low reliability.These results confirm the uncertainty assumption, that is, regular and severe outages yield an uninsurable context that deters households from subscribing to the electric service.
    Keywords: electrification, reliability, outages, Kenya, instrumental variable
    JEL: Q4 Q1 O18 O55 C26 C52
    Date: 2017–07
  8. By: Chadi ABDALLAH (FERDI); Roland Kangni KPODAR (Fonds Monétaire international)
    Abstract: This paper assesses the dynamic pass-through of crude oil price shocks to retail fuel prices using a novel database on monthly retail fuel prices for 162 countries. The impulse response functions suggest that on average, a one cent increase in crude oil prices per liter translates into a 1.2 cent increase in the retail gasoline price at peak level six months after the shock. However, the estimates vary significantly across country groups, ranging from about 0.5 cent in MENA countries to two cents in advanced economies. The results also show that positive oil price shocks have a larger impact than negative price shocks on the retail gasoline price. Finally, the paper underscores the importance of the new dataset in refining estimates of the fiscal cost of incomplete pass-through.
    Date: 2016–12

This nep-reg issue is ©2017 by Natalia Fabra. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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