Competition, Regulation and Broadband Diffusion in New Zealand

Competition, Regulation and Broadband Diffusion in New Zealand

Bronwyn Howell (Victoria University of Wellington, New Zealand and New Zealand Institute for the Study of Competition and Regulation, New Zealand)
DOI: 10.4018/978-1-59904-851-2.ch010
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Abstract

New Zealand offers a through-provoking case study of the effects of different competition and regulatory policies on broadband diffusion rates. Despite having one of the highest rates of Internet connection and usage in the OECD, widely available broadband infrastructure, and low broadband prices, broadband uptake per capita languishes in the bottom third of the OECD. While low uptake has typically been attributed to competition and regulatory factors associated with New Zealand’s ‘light-handed’ regulatory regime, this chapter proposes that a more credible explanation lies in a combination of New Zealand’s legacy of demand-side regulations, in particular the retail tariff options for voice telephony, and the limited value being derived by New Zealand residential consumers from the small range and narrow adoption of applications used currently that necessitate broadband connections. The New Zealand case illustrates the effect that legacy regulations can have on both the diffusion of new technologies per se and the choices made by consumers between different generational variants within that technology. The case indicates a need for more research on the effect of telecommunications industry regulations on demand-side uptake factors.

Key Terms in this Chapter

Flat-Rate Tariff: A variation of a two-part tariff where the second tariff is set at zero.

Variable Cost: A cost that increases in direct proportion to the number of units produced (suppliers) or consumed (consumers).

Monopoly: A single seller in a market.

Information Asymmetries: Differences among individuals in their information, especially when this information is relevant to determining an efficient plan or to evaluating individual performance.

Fixed Cost: A cost that does not vary with the number of units produced (for suppliers) or consumed (for consumers).

Local Loop Unbundling (LLU): A form of regulatory access requirement whereby an incumbent network provider is required to lease elements of the proprietary network (principally the twisted copper pair connecting end users’ premises to the local switching infrastructure) to competitors, to enable the competitors to provide a service in competition to the incumbent. Competitors may then add their own equipment to the incumbent’s equipment, and/or differentiate other aspects of the service provided, such as sales, product, and service bundles. For a full description, see Cave (2006).

Utility Function: A numerical representation of an individual’s preferences over different possible choices or situations.

Market Power: The ability of a firm to set prices profitably above competitive levels (marginal cost).

Two-Part Tariff: A firm charges a consumer a fee (the first tariff) for the right to buy as many units of the product as the consumer wants at a specified price (the second tariff). See Carlton and Perloff (2000, pp. 297-331).

Complete Chapter List

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Dedication
Editorial Advisory Board
Table of Contents
Foreword
Guy Fitzgerald
Foreword
Michael D. Williams
Preface
Yogesh K. Dwivedi, Anastasia Papazafeiropoulou, Jyoti Choudrie
Acknowledgment
Chapter 1
Yogesh K. Dwivedi, Anastasia Papazafeiropoulou
The aim of this chapter is to outline various factors reported in the 49 chapters of this handbook of research. The aim is also to organize... Sample PDF
Broadband Adoption and Diffusion (BAD): A Framework
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Chapter 2
Justin Henley Beneke
South Africa has fallen behind its international peers both developing and developed markets in the race to rollout broadband services. In fact... Sample PDF
South Africa: A Long Walk to Broadband Freedom
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Chapter 3
Challa Radhakumari
This chapter provides a summary relating to the functioning of two projects in the two Southern States of India, Andhra Pradesh and Kerala, to show... Sample PDF
Bridging the Digital Divide through Broadband Deployment
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Chapter 4
Yu-li Liu
Taiwan has been making great efforts to promote the fulfillment of its National Information Infrastructure (NII), with broadband network technology... Sample PDF
Broadband Policy, Market Competition, and User Adoption in Taiwan
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Chapter 5
Anwarul Islam, K. C. Panda
The bull’s eye of Bangladesh has to achieve the millennium development goal and to adapt the globalization, necessitate pursuing the development.... Sample PDF
ICT Competency of Bangladesh to Face Broadband Diffusion
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Chapter 6
Dal Yong Jin
This chapter attempts to ascertain the causes of the rapid growth of broadband services in the context of the broader socio-cultural elements. It... Sample PDF
Socio-Cultural Interpretations to the Diffusion and Use of Broadband Services in a Korean Digital Society
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Chapter 7
Hidenori Fuke
The structure of the telecommunications industry in Japan has been changing revolutionarily. The changes are observed in five phases: (1)... Sample PDF
Structural Changes and Regulatory Challenges in Japanese Telecommunications
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Chapter 8
Qiuyan Fan
Like many other governments in the world, the Australian government has taken a multi-faceted approach to promoting broadband Internet access. This... Sample PDF
Australia's Government Policy and Broadband Internet Access
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Chapter 9
Roger Saunders
This chapter suggests there is no new application to stimulate adoption of broadband by the mass market. Many new applications have been introduced... Sample PDF
Broadband for the Mass Market
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Chapter 10
Bronwyn Howell
New Zealand offers a through-provoking case study of the effects of different competition and regulatory policies on broadband diffusion rates.... Sample PDF
Competition, Regulation and Broadband Diffusion in New Zealand
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Chapter 11
Enrico Ferro, J. Ramon Gil-Garcia, Natalie Helbig
Reducing the digital divide in order to build an information society for all is one of the top priorities for European policymakers. A better... Sample PDF
Digital Divide and Broadband Access in an Italian Region
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Chapter 12
Ingjerd Skogseid
The chapter explores the characteristics of rural broadband infrastructure development. Taking the existing installed base into consideration, small... Sample PDF
Improving Broadband Access in Rural Areas
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Chapter 13
Antonios Alexiou, Christos Bouras, John Primpas, Dimitrios Papagiannopoulos
This chapter presents the design principles that cover the implementation of broadband infrastructure in the region of Western Greece, by examining... Sample PDF
The Design and Implementation of Business Models in Metropolitan Broadband Networks
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Chapter 14
Diana Wilson, Kevin O’Reilly, Dave Murray
In this chapter we consider from a marketing perspective the political, cultural/social, and economic factors, both micro and macro, affecting the... Sample PDF
Small World: The Irish Broadband Experience
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Chapter 15
Axel Schulz, Bernd Carsten Stahl, Simon Rogerson
There is considerable interest worldwide in broadband diffusion, with research focusing on aspects such as the provision of broadband in remote... Sample PDF
Social, Political and Ethical Responsibility in Broadband Adoption and Diffusion: A German Case Study
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Chapter 16
Wei-Min Hu, James E. Prieger
This chapter examines the supply of DSL broadband by the incumbent local exchange company (LEC) in five U.S. states in the earlier years of... Sample PDF
Competition in Broadband Provision and the Digital Divide
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Chapter 17
Elizabeth Fife, Laura Hosman, Francis Pereira
Though the potential benefits of broadband Internet adoption are great, the levels of take-up vary greatly around the world. Some governments have... Sample PDF
Governmental and Cultural Factors in Broadband Adoption
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Chapter 18
James E. Prieger, Sunhwa Lee
This study examines the impact of telecommunications regulatory policy on broadband service deployment. Using U.S. data covering all forms of access... Sample PDF
Regulation and the Deployment of Broadband
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Chapter 19
Peter Adams
This chapter explores whether past experiences with telecommunications providers and current ‘plans’ on offer serve as barriers between an... Sample PDF
Factors Affecting Broadband Adoption for Mainstream Consumers
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Chapter 20
Herbert Daly, Adriana Ortiz, Yogesh K. Dwivedi, Ray J. Paul, Javier Santos, Jose M. Sarriegi
The widespread domestic use of broadband Internet technology has been recognized to have a positive influence on national economies and improve the... Sample PDF
Developing a Dynamic View of Broadband Adoption
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Chapter 21
Yogesh K. Dwivedi, Banita Lal, Khalil Khoumbati
Studies on broadband adoption are just beginning to emerge and are exploratory in nature. Progress has been made to develop conceptual models to... Sample PDF
Employing Content Validity Approach for Improving the Content of Broadband Adoption Survey Instrument
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Chapter 22
Pierre Vialle, Olivier Epinette, Olivier Segard
The objective of this chapter is to highlight critical elements affecting the diffusion of broadband wireless Internet at a hotspot location... Sample PDF
Inside the Microcosm: A Case Study of a Wireless Internet Hotspot
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Chapter 23
Karianne Vermaas, Lidwien van de Wijngaert
The objective of the study in this chapter is to identify a small number of relatively homogeneous groups of Dutch Internet users (both broadband... Sample PDF
The Uses and Gratifications of Broadband Internet
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Chapter 24
Vishanth Weerakkody
Utilizing a survey approach, this research set out to explore the reasons for the slow progress in broadband adoption and investigates the factors... Sample PDF
Factors Affecting Attitudes Towards Broadband Adoption in the Kingdom of Saudi Arabia
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Chapter 25
Peter L. Stenberg, Mitchell Morehart
The Internet became enmeshed in U.S. businesses management practices over the last decade. During this period access and use of the Internet... Sample PDF
Characteristics of Farm and Rural Internet Use in the USA
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Chapter 26
Humberto T. Marques Neto, Leonardo C.D. Rocha, Pedro H.C. Guerra, Jussara M. Almeida, Wagner Meira Jr., Virgilio A.F. Almeida
This chapter presents a broadband user behavior characterization from an Internet service provider standpoint. Understanding these user behavior... Sample PDF
Broadband User Behavior Characterization
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Chapter 27
Sergio E. Godoy, Soledad Herrera
This chapter aims to quantify more exactly the adoption of broadband at the household level in Chile by assessing its impact on three types of... Sample PDF
Precisions about the Broadband Divide in Chile
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Chapter 28
Roya Gholami, John Lim, Sang-Yong Tom Lee
In spite of the increasing significance of broadband Internet, there are not many research papers explicitly addressing issues pertaining to its... Sample PDF
A Survey on the Adoption and Usage of Broadband Internet
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Chapter 29
Massimo G. Colombo, Luca Grilli, Cinzia Verga
Why do some small and medium enterprises (SMEs) adopt Internet broadband technologies (high-speed connection and complementary applications) and... Sample PDF
An Empirical Study of the Determinants of Broadband Adoption Among Italian SMEs?
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Chapter 30
Oluwasola Oni, Anastasia Papazafeiropoulou
Broadband is a relatively new technology and its adoption in the United Kingdom has been an issue due to its perceived benefits for businesses and... Sample PDF
Broadband Diffusion to SMEs in the UK
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Chapter 31
Alessandro Arbore, Andrea Ordanini
In front of traditional interpretations of the digital gap based on endogenous conditions of the firms, this chapter intends to emphasize the... Sample PDF
Environmental Drivers of E-Business Strategies Among SMEs
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Chapter 32
Boumediene Ramdani, Peter Kawalek
This chapter explores the factors impacting small to medium-sized enterprises’ (SMEs) adoption of broadband. It argues that information and... Sample PDF
Exploring SMEs Adoption of Broadband in the Northwest of England
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Chapter 33
Andrea Ordanini, Alessandro Arbore
This study intends to emphasize the importance that external sources of pressure may have on the level of ICT involvement among small and medium... Sample PDF
External Pressures for Adoption of ICT Services Among SMEs
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Chapter 34
Kate Carney Landow, Michelle Fandre, Raghu Nambiath, Ninad Shringarpure, Harvey Gates, Artur Lugmayr, Scott Barker
This chapter focuses on evaluating Internet protocol television (IPTV) business models from different service providers through the prism of the... Sample PDF
Internet Protocol Television
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Chapter 35
Stanford L. Levin, John B. Meisel, Timothy S. Sullivan
This chapter describes the far-reaching effects of broadband Internet access on the motion picture industry. It first provides a summary of the... Sample PDF
The Internet's Impact on the Law and Economics Of the US's Motion Picture Industry
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Chapter 36
Aradhana Srivastava
This chapter highlights the major issues in the use of broadband technologies in health care in developing countries. The use of Internet... Sample PDF
Broadband for Health in Developing Countries
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Chapter 37
Peter Farr, Isabelle Ellis, John Royle
This chapter describes an innovative broadband initiative that connects a group of general practices, medical specialists, hospitals, and other... Sample PDF
Improving Health Services Via Advanced ICT Networks
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Chapter 38
Tanja Bratan, Malcolm Clarke, Joanna Fursse, Russell Jones
The UK’s National Health Service (NHS) is undergoing great reform. Driven by a demand for higher quality health care provision, information and... Sample PDF
Remote Patient Monitering in Residential Care Homes: Using Wireless and Broadband Networks
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Chapter 39
Kenichi Ishii
In Japan, both the cheapest wired broadband services and the most advanced 3G mobile phone services are widely available. Because of recent... Sample PDF
Social Consequences of Broadband Access in Japan
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Chapter 40
Erik Lundmark, Alf Westelius
This chapter presents a descriptive study of the use of information and communication technology (ICT) and the change in communication patterns in... Sample PDF
Internet -Based Changes in Organizational Communication
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Chapter 41
Alex De Smedt
This chapter focuses on the equipment in the home, providing broadband access to the users into the home, called residential gateway. The chapter... Sample PDF
Ubiquitous Communication Via Residential Gateways
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Chapter 42
Morten Falch
Broadband is seen as a key infrastructure for developing the information society. For this reason many Governments are actively engaged in... Sample PDF
Adoption of Broadband Services: The Role of National Policies
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Chapter 43
Banani Nandi, Chandana Chakraborty
In the light of the emerging consensus on the potential impact of broadband technology on economic growth and development, this chapter analyzes the... Sample PDF
Broadband Diffusion and its Driving Forces
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Chapter 44
Arturo Robles Rovalo, Claudio Feijóo González, José Luis Gómez-Barroso
The “geographic” digital divide is obvious when comparing more developed countries to the rest. Its first and most obvious sign is the difference in... Sample PDF
Diffusion of Broadband Access in Latin America
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Chapter 45
Dimitris Varoutas, Christos Michalakelis, Alexander Vavoulas, Konstantina Deligiorgi
This chapter is concerned with the methodologies for the study of the diffusion patterns and demand estimation, as well the pricing schemas for... Sample PDF
Diffusion Forecasting and Price Evolution of Broadband Services in Europe
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Chapter 46
Inmaculada Cava Ferreruela
The aim of this chapter is to provide some insights about the explaining patterns of broadband deployment and adoption. This problem is addressed by... Sample PDF
Explaining Patterns of Broadband Development in OECD Countries
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Chapter 47
Diana Korsakaite, Tomas Lamanauskas
This chapter introduces the statistical analysis of a number of information and communication technologies (ICT) market indicators as a means to... Sample PDF
ICT Statistics for Broadband Promoting Regulatory
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Chapter 48
Bardo Fraunholz, Chandana Unnithan
VoIP is a technology that has received much attention over the past few years. Speculations are rampant that it will be “the technology” for... Sample PDF
Impact of Broadband VoIP on Telecoms: A Cross Country Analysis
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Chapter 49
Catherine Middleton, Shanton Chang
Broadband Internet connectivity is seen as a means to increase the efficiency and competitiveness of an economy. But despite ongoing efforts to... Sample PDF
The Adoption of Broadband Internet in Australia and Canada
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Chapter 50
Nir Kshetri, Nikhilesh Dholakia
Telecommunications networks of India and the People’s Republic of China are among the largest in the world. The two economies have a number of areas... Sample PDF
Comparing China's and India's Evolution of Broadband Internet in the Developing World
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About the Contributors