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The impact on broadband access to the Internet of the dual ownership of telephone and cable networks

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  • Pereira, Pedro
  • Ribeiro, Tiago

Abstract

In Portugal, until recently, the telecommunications incumbent offered broadband access to the Internet, both through digital subscriber line and cable modem. We estimate the impact on broadband access to the Internet of the structural separation of these two businesses. Using a panel of consumer level data and a random effects mixed logit model, we estimate the price elasticities of demand and the marginal costs of broadband access to the Internet. Based on these estimates, we simulate the effect of structural separation on prices and social welfare. Our estimates indicate that structural separation would cause a substantial welfare increase. These results raise questions about the policy of some countries of allowing the dual ownership of telephone and cable networks.

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Bibliographic Info

Article provided by Elsevier in its journal International Journal of Industrial Organization.

Volume (Year): 29 (2011)
Issue (Month): 2 (March)
Pages: 283-293

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Handle: RePEc:eee:indorg:v:29:y:2011:i:2:p:283-293

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Web page: http://www.elsevier.com/locate/inca/505551

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Keywords: Broadband Structural separation Prices;

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Citations

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Cited by:
  1. Pereira, Pedro & Ribeiro, Tiago & Vareda, João, 2013. "Delineating markets for bundles with consumer level data: The case of triple-play," International Journal of Industrial Organization, Elsevier, vol. 31(6), pages 760-773.
  2. Zucchini, Leon & Claussen, Jörg & Trüg, Moritz, 2013. "Tariff-Mediated Network Effects versus Strategic Discounting: Evidence from German Mobile Telecommunications," Discussion Papers in Business Administration 14848, University of Munich, Munich School of Management.
  3. Lukasz Grzybowski & Pedro Pereira, 2006. "Simulation of Merger in Mobile Telephony in Portugal," Working Papers 06-22, NET Institute, revised Oct 2006.
  4. Duarte Brito & Pedro Pereira & Joaquim Ramalho, 2013. "Mergers, Coordinated Effects and Efficiency in the Portuguese Non-Life Insurance Industry," CEFAGE-UE Working Papers 2013_18, University of Evora, CEFAGE-UE (Portugal).

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