The potential economic importance of electronic commerce, and the role of broadband in supporting e-commerce, has increasingly led governments to place emphasis on facilitating access to broadband networks. To a large extent the emphasis has been on a range of policies aimed at supporting development and diffusion of high speed network capability in the local loop. Although broadband infrastructure deployment is in the process of development and the extent to which it will cover entire populations or geographic areas is still not clear, governments appear to want to accelerate the infrastructure investment.

There is a wide range of government initiatives structured in different ways and their underlying justifications are often quite different. In this context, the main concern of this paper is to examine whether these initiatives are efficient in spurring broadband deployment and to what extent governments should be involved. The paper argues that government policies should ...