Broadband “open access” regulation mandates openness of conduits (e.g. upgraded cable television) to service providers (e.g. America Online), but policy discussion often suggests that the ultimate goal is openness to advanced content (streaming video, interactive e-commerce, etc.). We define two forms of regulation, open access and common carriage, and discuss when they are equivalent. We argue that they are quite different in local access broadband. We develop a systems model with free entry and competition in all three industry segments (conduits, service providers, and content) and examine how open access regulation affects the number of firms in each. We confirm the view that an open access requirement can reduce entry of physical conduits, and more surprising we also describe conditions under which it can reduce the amount of content available to consumers.
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Paper provided by Wesleyan University, Department of Economics in its series Wesleyan Economics Working Papers with number
2004-002.
Find related papers by JEL classification: L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance L5 - Industrial Organization - - Regulation and Industrial Policy L9 - Industrial Organization - - Industry Studies: Transportation and Utilities
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