Table of Contents
Chapter 1 Introduction…………………………………………………………………………………….17
1.1 Background and relevance ……………………………………………………………………..17
1.2 Research objective, research questions……………………………………………………25
1.3 Thesis outline ……………………………………………………………………………………….30
1.4 References …………………………………………………………………………………………..32
Chapter 2 Domain description …………………………………………………………………………35
2.1 Three perspectives on broadband in the local loop …………………………………….35
2.2 The Dutch broadband market………………………………………………………………….39
2.2.1 Supply side ………………………………………………………………………………………39
2.2.2 Demand side…………………………………………………………………………………….50
2.2.3 Conclusion ……………………………………………………………………………………….51
2.3 Broadband technology……………………………………………………………………………52
2.3.1 Copper-based broadband technologies………………………………………………..54
2.3.2 Cable-based broadband technologies ………………………………………………….57
2.3.3 Fiber-based technologies……………………………………………………………………60
2.3.4 Fixed –wireless broadband technologies………………………………………………62
2.3.5 Analysis …………………………………………………………………………………………..68
2.3.6 Evolutionary paths …………………………………………………………………………….71
2.3.7 Discussion and conclusion………………………………………………………………….77
2.4 The policy & regulation perspective: stimulating and regulating broadband rollout …………………………………………………………………………………………………………..78
2.4.1 Introduction ………………………………………………………………………………………78
2.4.2 The 2002 Telecommunications Act………………………………………………………81
2.4.3 A second way of public intervention in the broadband market: national and
European stimulation programmes …………………………………………………………………..88
2.4.4 Action plans to stimulate broadband roll-out ………………………………………….88
2.5 Conclusion……………………………………………………………………………………………96
2.6 References …………………………………………………………………………………………..99
Chapter 3 Meta-analysis –the development of a conceptual model for broadband
roll-out …………………………………………………………………………………………….107
3.1 Methodology ……………………………………………………………………………………….107
3.1.1 Meta-Analysis …………………………………………………………………………………107
3.1.2 Content Analysis……………………………………………………………………………..109
3.1.3 Network analysis……………………………………………………………………………..112
3.2 Results: Broadband roll-out- a black hole………………………………………………..113
3.2.1 Towards a conceptual model for broadband roll-out……………………………..115
3.3 Conclusion………………………………………………………………………………………….119
3.4 References …………………………………………………………………………………………121
Chapter 4 Infrastructural investments: dealing with uncertainty and irreversibility..
…………………………………………………………………………………………….123
4.1 Financial methods to assess business value of investments………………………124
4.1.1 Discounted cash flow methods ………………………………………………………….124
4.1.2 Ratio methods…………………………………………………………………………………125
4.2 From financial options to ‘real options’ ……………………………………………………126
4.3 Types of real options ……………………………………………………………………………126
4.4 Risk and uncertainty …………………………………………………………………………….128
4.4.1 Uncertainty……………………………………………………………………………………..128
4.4.2 Risk……………………………………………………………………………………………….132
4.4.3 A typology framework for risk & uncertainty…………………………………………133
4.5 Reducing risk and uncertainty ……………………………………………………………….135
4.6 Conclusion………………………………………………………………………………………….136
4.7 References …………………………………………………………………………………………138
Chapter 5 Strategic decision-making in a complex, dynamic and uncertain
environment …………………………………………………………………………………………….143
5.1 The way towards a decision: the decision-making process ………………………..148
5.2 Describing the broadband market and explaining the realisation of decisions: the
Garbage Can …………………………………………………………………………………………………..150
5.2.1 Telecom companies as organised anarchies……………………………………….150
5.2.2 Decision-making within the garbage ban …………………………………………….151
5.3 Logical Incrementalism…………………………………………………………………………152
5.4 Conclusions ………………………………………………………………………………………..154
5.5 References …………………………………………………………………………………………156
Chapter 6 Exploring the rationale behind broadband roll-out- Qualitative analysis ..
…………………………………………………………………………………………….159
6.1 Method……………………………………………………………………………………………….160
6.2 The content-related side of broadband roll-out: the impact of technology, market
and policy………………………………………………………………………………………………………..164
6.2.1 Technology …………………………………………………………………………………….164
6.2.2 Market……………………………………………………………………………………………167
6.2.3 Policy and regulation………………………………………………………………………..170
6.3 Risk & uncertainty………………………………………………………………………………..173
6.3.1 Sources of risk and uncertainty………………………………………………………….173
6.3.2 Effects of risk & uncertainty ………………………………………………………………180
6.3.3 Dealing with risk & uncertainty…………………………………………………………..182
6.4 The decision-making process on broadband roll-out …………………………………184
6.4.1 Who’s in charge? …………………………………………………………………………….184
6.4.2 The duration of decision-making and roll-out ……………………………………….186
6.4.3 Cooperation in the value chain ………………………………………………………….189
6.4.4 Financial assessment methods………………………………………………………….191
6.4.5 Evolutionary or revolutionary upgrades……………………………………………….193
6.5 Applying decision-making theory to broadband local loop upgrades ……………197
6.5.1 The Garbage Can: criteria for organisational anarchies…………………………198
6.5.2 The Garbage Can; applicability of streams and decision windows ………….201
6.5.3 Logical Incrementalism: decisions are made in small steps to keep options
open for feedback and adjustments ………………………………………………………………..204
6.6 Concept validation as a first step in model validation ………………………………..207
6.6.1 The four-phase base model ………………………………………………………………207
6.6.2 Phase 1: Decision-making process to upgrade/roll-out broadband………….209
6.6.3 Phase 2: Network upgrade/roll-out……………………………………………………..217
6.6.4 Phase 3: End-user demand & adoption ………………………………………………219
6.6.5 Phase 4: Revenues………………………………………………………………………….221
6.6.6 Analysis …………………………………………………………………………………………222
6.7 Conclusions ………………………………………………………………………………………..225
6.8 References …………………………………………………………………………………………230
Chapter 7 Towards an explanatory parsimonious model- quantitative analysis..233
7.1 Exploring the field: national pre-test ……………………………………………………….234
7.1.1 Method…………………………………………………………………………………………..234
7.1.2 Development of scales……………………………………………………………………..235
7.2 International survey ……………………………………………………………………………..238
7.2.1 Method…………………………………………………………………………………………..238
7.2.2 Construction of scales………………………………………………………………………241
7.3 Exploring broadband roll-out: descriptive results ………………………………………243
7.3.1 The content-related part: Factors influencing the decision to upgrade or rollout broadband……………………………………………………………………………………………..243
7.3.2 Risk and uncertainty ………………………………………………………………………..251
7.3.3 The process-related side of network upgrades …………………………………….254
7.4 Towards a parsimonious explanatory model for broadband roll-out …………….266
7.5 Limitations and discussion…………………………………………………………………….274
7.6 Conclusions ………………………………………………………………………………………..275
7.7 References …………………………………………………………………………………………278
Chapter 8 Conclusion Shedding light on the black hole ……………………………….279
8.1 Introduction…………………………………………………………………………………………279
8.2 Overview of the research………………………………………………………………………279
8.3 Answering the research questions………………………………………………………….285
8.3.1 The impact of technological, market-related and regulatory factors on
broadband roll-out………………………………………………………………………………………..285
8.3.2 Exploring available multidisciplinary frameworks on broadband roll-out …..290
8.3.3 Assessing investment options under risk and uncertainty………………………291
8.3.4 Dealing with risk and uncertainty in investment-related decisions …………..293
8.3.5 The course of the decision-making process…………………………………………297
8.3.6 Towards a parsimonious model for broadband-related decision-making….299
8.3.7 Incremental decision-making is a logic response to uncertain interrelation
between factors from different domains …………………………………………………………..301
8.4 Limitations of this research and recommendations for further research ……….303
8.5 Research Contributions ………………………………………………………………………..306
8.5.1 Implications for scientists………………………………………………………………….306
8.5.2 Implications for strategic decision-makers …………………………………………..308
8.5.3 Implications for policy-makers……………………………………………………………309
8.6 References …………………………………………………………………………………………313
Annexes ……………………………………………………………………………………………………..317
Annex A Numeric Tables Factor analysis quantitative results Pre-test …………..319
Annex B Numeric tables descriptive results quantitative analysis main study..321
Annex C Numeric tables confirmatory factor analysis & structural equation
modelling ……………………………………………………………………………………………………..329
Annex D Questionnaire………………………………………………………………………………..335
Annex E Articles and papers included in the Meta-analysis…………………………..351
Nederlandse samenvatting………………………………………………………………………………….355
Abstract
Several market studies have indicated that the roll-out of broadband has significant economic and social relevance. The investments in broadband infrastructures needed to realise these economic and social benefits are, however, high-risk. This is firstly caused by the fact that the roll-out of access networks is extremely costly and requires high initial investments. Moreover, the multidisciplinary environment and involvement of many actors with diverging objectives and interests cause high complexity. Moreover, the market for broadband is changing fast and continuously. Although broadband has been on the academic research agenda for quite some time, this has as yet not resulted in a structured insight into the decision-making process around the upgrading of broadband networks, seen from the perspective of private operators and taking into account the vast complexity of the surroundings in which this decision-making process takes place in. The objective of this research was to provide a unifying theory combining technical, economic, market-related and regulatory factors with regard to an evolutionary, flexible approach of network upgrading from a decision-maker perspective. The result of this research is a robust, explanatory, parsimonious model for the impact and outcomes of broadband roll-out. This model provides a certain degree of stability in this multidisciplinary, unpredictable and highly dynamic research field.
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