New Zealand Institute for the study of competition and regulation inc.

Abstract

Local loop unbundling has been widely promulgated by policy-makers as a significant factor stimulating broadband uptake and therefore an essential component of a developing ‘information economy'.   Whilst empirical evidence is sparse, and at best equivocal in respect of a consistent positive and statistically significant effect, a recent study commissioned and published by the OECD does find evidence of such effects.  When correcting for omitted variables, correlated data and methodological inconsistencies, our analysis using the models and data from this report instead support the contention that LLU's contribution to the level of national broadband uptake is materially very small, and not statistically significant.   Continued advocacy for the policy as a stimulant for broadband uptake on the basis of the OECD-published report is misguided.