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Building and Delivering the Virtual World: Commercializing Services for Internet Access

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  • Shane Greenstein

Abstract

This study analyzes the service offerings of Internet Service Providers (ISPs), the commercial suppliers of Internet access in the United States. It presents data on the services of 2089 ISPs in the summer of 1998. By this time, the Internet access industry had undergone its first wave of entry and many ISPs had begun to offer services other than basic access. This paper develops an Internet access industry product code which classifies these services. Significant heterogeneity across ISPs is found in the propensity to offer these services, a pattern with an unconditional urban/rural difference. Most of the explained variance in behavior arises from firm-specific factors, with only weak evidence of location-specific factors for some services. These findings provide a window to the variety of approaches taken to build viable businesses organizations, a vital structural feature of this young market.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 7690.

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Date of creation: May 2000
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Publication status: published as Greenstein, Shane. "Building And Delivering The Virtual World: Commercializing Services For Internet Access," Journal of Industrial Economics, 2000, v48(4,Dec), 391-411.
Handle: RePEc:nbr:nberwo:7690

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  1. Brynjolfsson, Erik. & Hitt, Lorin M., 1994. "Information technology as a factor of production : the role of differences among firms," Working papers, Massachusetts Institute of Technology (MIT), Sloan School of Management 3715-94. CCSTR ; #173., Massachusetts Institute of Technology (MIT), Sloan School of Management.
  2. Trajtenberg, M. & Bresnahan, T.F., 1992. "General Purpose Technologies: "Engines of Growth"," Papers, Tel Aviv 16-92, Tel Aviv.
  3. Shane Greenstein, . "Commercialization of the Internet: The Interaction of Public Policy and Private Choices," IPR working papers, Institute for Policy Resarch at Northwestern University 00-11, Institute for Policy Resarch at Northwestern University.
  4. Susan Athey & Scott Stern, 1998. "An Empirical Framework for Testing Theories About Complimentarity in Organizational Design," NBER Working Papers 6600, National Bureau of Economic Research, Inc.
  5. Mitchell,Bridger M. & Vogelsang,Ingo, 1992. "Telecommunications Pricing," Cambridge Books, Cambridge University Press, Cambridge University Press, number 9780521416672.
  6. Demsetz, Harold, 1988. "The Theory of the Firm Revisited," Journal of Law, Economics and Organization, Oxford University Press, Oxford University Press, vol. 4(1), pages 141-61, Spring.
  7. Shane M. Greenstein & Mercedes M. Lizardo & Pablo T. Spiller, 1997. "The Evolution of Advanced Large Scale Information Infrastructure in the United States," NBER Working Papers 5929, National Bureau of Economic Research, Inc.
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Cited by:
  1. SeungJae Shin & Martin B. Weiss & Jack Tucci, 2007. "Rural Internet access: over-subscription strategies, regulation and equilibrium," Managerial and Decision Economics, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 28(1), pages 1-12.
  2. Angelique Augereau & Shane Greenstein & Marc Rysman, 2004. "Coordination vs. Differentiation in a Standards War: 56K Modems," NBER Working Papers 10334, National Bureau of Economic Research, Inc.
  3. Todd Sinai & Joel Waldfogel, 2003. "Geography and the Internet: Is the Internet a Substitute or a Complement for Cities?," NBER Working Papers 10028, National Bureau of Economic Research, Inc.
  4. Steve Thompson & Mike Wright, 2005. "Edith Penrose's contribution to economics and strategy: an overview," Managerial and Decision Economics, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 26(2), pages 57-66.
  5. Rajeev Goel & Edward Hsieh & Michael Nelson & Rati Ram, 2006. "Demand elasticities for Internet services," Applied Economics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 38(9), pages 975-980.
  6. Shane Greenstein, 2006. "Innovation and the Evolution of Market Structure for Internet Access in the United States," Discussion Papers, Stanford Institute for Economic Policy Research 05-018, Stanford Institute for Economic Policy Research.
  7. Peter Stenberg, 2011. "Investment in Rural Broadband Technologies," ERSA conference papers ersa11p1028, European Regional Science Association.

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