Competition, Regulation and Broadband Diffusion: the Case of New Zealand

Abstract

AbstractNew 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 prices broadband uptake per capita languishes in the bottom third of the OECD. Whilst low uptake has typically been attributed to competition and regulatory factors associated with New Zealand's 'light-handed' regulatory regime this chapter proposes that the most likely reason is a combination of legacy demand-side regulations in particular the tariff options for voice telephony and limited value being derived by residential consumers from the small range of applications currently necessitating broadband connections. The New Zealand case illustrates the effect that legacy regulations can have on the diffusion of new technologies and indicates a need for more research on the effect of telecommunications industry regulations on demand-side uptake factors.