Determinants of Investment in VHCNs reveals important findings to meet Gigabit Society targets

Latest edition of Hexagon summarises main findings of report for BEREC

The European Electronic Communications Code (EECC) requires national regulatory authorities to promote investment in very high capacity networks (VHCNs), defined as fibre networks at least to the distribution point[i].

In December 2018 the Body of European Regulators of Electronic Communications (BEREC) awarded SPC Network, in partnership with DAS Ltd, Strategy Dynamics and Greenwood, a contract to examine the determinants of investment in VHCNs using a System Dynamics modelling approach. The study, which can be downloaded from the SPC Network and BEREC websites, made a number of key findings:

• Determinants of investment are path dependent. There is no single strategy suitable for all conditions.
• Ecosystems are Dynamic.
• Actions taken by NRAs affect not just the regulated firm but have foreseeable second order effects throughout that ecosystem, which need to be captured to prevent unintended consequences.