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This article analyzes the role of Finnish regulation in achieving thebroadband penetration goals defined by the National Regulatory Authority. It iswell known that in the absence of regulatory mitigation the population densityhas a positive effect on broadband diffusion. Hence, we measure the effect ofthe population density on the determinants of broadband diffusion throughoutthe postal codes of Finland via Geographically Weighted Regression. We suggestthat the main determinants of broadband diffusion and the population densityfollow a spatial pattern that is either concentric with a weak/medium/strongstrength or non-concentric convex/concave. Based on 10 patterns, we argue thatthe Finnish spectrum policy encouraged Mobile Network Operators to satisfyambitious Universal Service Obligations without the need for a UniversalService Fund. Spectrum auctions facilitated infrastructure-based competitionvia equitable spectrum allocation and coverage obligation delivery via low-feelicenses. However, state subsidies for fiber deployment did not attractinvestment from nationwide operators due to mobile preference. These subsidiesencouraged demand-driven investment, leading to the emergence of fiber consumercooperatives. To explain this emergence, we show that when population densitydecreases, the level of mobile service quality decreases and communitycommitment increases. Hence, we recommend regulators implementing market-drivenstrategies for 5G to stimulate local investment. For example, by allocating the3.5 GHz and higher bands partly through local light licensing.

The mitigating role of regulation on the concentric patterns of broadband diffusion. The case of Finland