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This paper aims to study the competition problems and market failures in the Canary Islands and propose an alternative management model for the telecommunication transmission network. This model is based on a wholesale-only open-access transmission network, available to all the retail service providers of this region, and managed by a unique entity subject to regulation with cost-based prices. The proposal hopefully will help to debate about the implementation of certain regulatory models in the network industries, concerning telecommunication submarine cables connecting archipelagos.

An empirical approach has been used, based on the observation and analysis of the regulatory policies applied to the wholesale transmission networks in the Canary Islands, Azores and Madeira archipelagos.

Results show a persistent margin squeeze situation on the retail broadband market in the Canary Islands, due to the pricing strategy on the Spanish mainland-Canaries wholesale market, which is, in turn, delaying the entry of alternatives and the level of development and efficiency of competition. The risk of duopoly collusion is also present on this wholesale market. Additionally, public aids will be needed to replace the systems connecting with the non-capital islands and to provide redundancy to El Hierro. The alternative proposal might help preventing the above. Eventually, several insights are considered for further investigation.

Little attention has been paid to this topic in the literature, regarding the analysis of regulatory policies applied over fiber optic submarine cable infrastructures in fragmented territories like archipelagos. Consequently, an empirical analysis has been accomplished to emphasize this research work, based on the regulatory policies adopted.

This paper aims to study the results of the public aid programmes, through supply-side subsidies, for ultra-fast next generation access (NGA) broadband deployment that have been developed in The Canary Islands since 2013. These findings will, in turn, hopefully help the policymakers of archipelagos define their own ultra-fast broadband development plans.

An empirical approach has been used, based on the observation of the historical results obtained in the archipelago and the way broadband was diffused throughout the territory.

Results show that the broadband has developed asymmetrically in the archipelago, which, in turn, has caused the onset of a triple spatial digital divide. It was also observed that some aspects of the current way that such programmes are created and, consequently, the way that public funds are allocated, that could be improved and might help prevent geographical discrimination. Lastly, several insights have been presented for further investigation.

A large amount of scientific research has been carried out studying ultra-fast broadband NGA networks deployment. Less literature can be found on this topic when considering the specificities of fragmented territories like archipelagos. This paper tries to contribute with some empirical insights about such specific scenarios.