Impact of regulation on the expansion of fixed broadband in Brazil: an analysis of difference in differences from 2007 to 2021.
The fixed broadband retail service, provided under the private regime, but of collective interest, has undergone significant changes in recent years, including a greater penetration in Brazilian municipalities, associated with the increase in the number of accesses and the speeds contracted by consumers. Fixed broadband has contributed to activities related to education, such as video lessons, including in real time, as well as work activities, such as home working and teleworking, and for leisure at home, with content distribution services, by streaming, including in high resolution, and the growing number of producers and consumers of content on social networks, as well as for the fourth industrial revolution, which involves industry 4.0, the internet of things, video surveillance services in high resolution and with access remote in real time, among others. This market is regulated by the Agência Nacional de Telecomunicações (Anatel). Considering the regulatory framework developed over the years by Anatel, the development of the sector in Brazil is analyzed, detailed in categories of Brazilian municipalities separated by degree of competitiveness. In these categories, there are municipalities that received an asymmetric regulatory policy of regulated prices, considered by Anatel as markets in which the offer of services was carried out by companies holding Significant Market Power in the wholesale service, with high correlation with the retail service, and municipalities that did not receive this policy.
Based on econometric difference-in-differences (DD) models, the aim is to evaluate
the impact of Anatel's regulatory policies for fixed broadband retail, whose mechanism
adopted in one of them was the regulation of prices in a category of municipalities, of
the wholesale market itself, with a direct impact on two categories of the fixed
broadband retail market, namely: a potentially competitive market or a less competitive
market. The variables to be analyzed will be the density of accesses over the number of
inhabitants, on a municipal scale, and the percentage of accesses in the highest speed
band in relation to the other bands, considering the total accesses of each municipality.
The choice of these two variables is based on the evolution of the service that becomes
mature from higher access densities and on the needs of consumers and technological
evolution that aim at higher speeds and also, irreversibly, to meet this service and other
services that have direct dependence on fixed broadband to be hired.