The mitigating role of regulation on the concentric patterns of broadband diffusion. The case of Finland

Abstract

This article analyzes the role of Finnish regulation in achieving the broadband penetration goals defined by the National Regulatory Authority. It is well known that in the absence of regulatory mitigation the population density has a positive effect on broadband diffusion. Hence, we measure the effect of the population density on the determinants of broadband diffusion throughout the postal codes of Finland via Geographically Weighted Regression. We suggest that the main determinants of broadband diffusion and the population density follow a spatial pattern that is either concentric with a weak/medium/strong strength or non-concentric convex/concave. Based on 10 patterns, we argue that the Finnish spectrum policy encouraged Mobile Network Operators to satisfy ambitious Universal Service Obligations without the need for a Universal Service Fund. Spectrum auctions facilitated infrastructure-based competition via equitable spectrum allocation and coverage obligation delivery via low-fee licenses. However, state subsidies for fiber deployment did not attract investment from nationwide operators due to mobile preference. These subsidies encouraged demand-driven investment, leading to the emergence of fiber consumer cooperatives. To explain this emergence, we show that when population density decreases, the level of mobile service quality decreases and community commitment increases. Hence, we recommend regulators implementing market-driven strategies for 5G to stimulate local investment. For example, by allocating the 3.5 GHz and higher bands partly through local light licensing.

A Review of the Literature About Broadband Internet Connections and Rural Development (1995-2022)

“…In general, this group of studies finds rural areas lag urban areas in several facets of broadband availability (Khatiwada and Pigg 2010; Renkow 2011; Park 2017). Another common finding is that availability is higher in places with favorable demand conditions (e.g., higher income households, greater density of people and/or businesses) (Grubesic 2004; Whitacre and Mahasuweerachai 2008; Khatiwada and Pigg 2010; Benseny et al 2019). Demand conditions are frequently more favorable in urban rather than rural areas.…”

Supportive 5G Infrastructure Policies are Essential for Universal 6G: Assessment Using an Open-Source Techno-Economic Simulation Model Utilizing Remote Sensing

“…More recently, universal service requirements have been applied to mobile broadband markets via new spectrum licensing regimes. This has enabled the delivery cost to be subjected to market efficiencies via the auction bidding process [106], simultaneously delivering on equity and efficiency objectives [107]. Different designs have been implemented in many countries, each reflecting heterogenous institutional preferences, such as the degree of market involvement and the level of top-down government control [108]- [110].…”

City strategies for a 5G small cell network on light poles

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