Providing Incentives for Private Investment in Municipal Broadband Networks: Evidence from the Netherlands

The growth of municipal glass fiber networks across Europe has since the 1990s been surrounded by high uncertainty and risk. As the existing legal and regulatory framework in the European Union (EU) provided sufficient grounds for an innovation rationale, the Dutch government decided in early 2000s to provide subsidies for a regional experimentation and testing environment called "Kenniswijk" (Knowledge District) with Nuenen as location for a glass fiber network. In order to examine the effects of this network, we utilize the concept of local experimentation and testing system, i,e.an environment in which different actors are able to explore and learn from the implementation of new infrastructure technologies and services in a (local) real life setting. By undertaking a techno-economic analysis, we found a) that government subsidies have been vital for local municipal network in Nuenen and b) that the knowledge gained about the characteristics of this network facilitated further investment of municipal networks throughout the Netherlands.