Net Neutrality, Unbundling, and their Effects on International Investment in Next-Generation Networks

This paper examines the net neutrality debate in countries outside the U.S., particularly in the EU. Most appear to have endorsed the idea of net neutrality and believe that policies promoting unbundling - mandatory network sharing - will ensure neutral networks. We argue that unbundling may not necessarily affect incumbent incentives to prioritize certain traffic. Because unbundling can affect investment incentives, we use a new dataset to examine empirically the effects of unbundling on investment in new fiber networks in Europe. We find a significant negative correlation between the number of unbundled DSL connections per capita and the number of fiber connections.