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Platform Competition and Broadband Uptake: Theory and Empirical Evidence from the European Union

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Author Info
Walter Distaso (Department of Economics, University of Exeter, UK)
Paolo Lupi (Autorita per le garanzie nelle comunicazioni - AGCOM, Italy)
Fabio M. Manenti (Dip. Scienze Economiche 'M. Fanno', Universita di Padova, Italy)

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Abstract

Broadband access provides users with high speed, always-on connectivity to the Internet. Due to its superiority, broadband is seen as the way for consumers and firms to exploit the great potentials of new applications. This has generated a policy debate on how to stimulate adoption of broadband technology. One of the most disputed issues is about competition policies: these may be intended to promote competition in the Digital Subscriber Line (DSL) segment of the market (intra- platform competition), or to stimulate entry into the market for alternative platforms such as cable access or fiber optics (inter- platform competition). Using a model of oligopoly competition between differentiated products, our paper explicitly studies the effect of inter and intra platform competition on the diffusion of broadband access. The implications of the model are then tested using data from 14 European countries. The econometric evidence confirms the results of the theoretical model and indicates that while inter-platform competition drives broadband adoption, competition in the market for DSL services does not play a significant role. The results also confirm that lower unbundling prices stimulate broadband uptake.

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Publisher Info
Paper provided by EconWPA in its series Industrial Organization with number 0504019.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length: 24 pages
Date of creation: 18 Apr 2005
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Handle: RePEc:wpa:wuwpio:0504019

Note: Type of Document - pdf; pages: 24
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Web page: http://129.3.20.41

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Related research
Keywords: Broadband; inter-platform and intra-platform competition; local loop unbundling;

Other versions of this item:

Find related papers by JEL classification:
L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications

This paper has been announced in the following NEP Reports:

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Oecd, 2001. "The Development of Broadband Access in the OECD Countries," OECD Digital Economy Papers 56, OECD, Directorate for Science, Technology and Industry. [Downloadable!]
  2. Oecd, 2003. "Broadband Driving Growth: Policy Responses," OECD Digital Economy Papers 75, OECD, Directorate for Science, Technology and Industry. [Downloadable!]
  3. Jerry A. Hausman & J. Gregory Sidak & Hal J. Singer, 2001. "Cable Modems and DSL: Broadband Internet Access for Residential Customers," American Economic Review, American Economic Association, vol. 91(2), pages 302-307, May. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Michiel Bijlsma & Viktória Kocsis & Nelli Valmari, 2008. "Competition and access price regulation in the broadband market," CPB Discussion Papers 106, CPB Netherlands Bureau for Economic Policy Analysis. [Downloadable!]
  2. Viktória Kocsis & Paul Bijl, 2007. "Network neutrality and the nature of competition between network operators," International Economics and Economic Policy, Springer, vol. 4(2), pages 159-184, August. [Downloadable!] (restricted)
  3. Sangwon Lee & Justin S. Brown, 2008. "The Diffusion of Fixed Broadband: An Empirical Analysis," Working Papers 08-19, NET Institute, revised Sep 2008. [Downloadable!]
  4. Baranes, Edmond & Bourreau, Marc, 2005. "An Economist's Guide to Local Loop Unbundling," MPRA Paper 2510, University Library of Munich, Germany. [Downloadable!]
    Other versions:
  5. Paul de Bijl & Martin Peitz, 2008. "Innovation, convergence and the role of regulation in the Netherlands and beyond," CPB Discussion Papers 108, CPB Netherlands Bureau for Economic Policy Analysis. [Downloadable!]
  6. Francesc Trillas, 2008. "Regulatory federalism in network industries," Working Papers 2008/8, Institut d'Economia de Barcelona (IEB). [Downloadable!]
  7. Claudia Salim, 2009. "Platform Standards, Collusin and Quality Incentives," Discussion Papers 257, SFB/TR 15 Governance and the Efficiency of Economic Systems, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich. [Downloadable!]
  8. Bijl, P.W.J. de & Peitz, M., 2007. "Innovation, Convergence and the Role of Regulation in the Netherlands," Discussion Paper 2007-016, Tilburg University, Tilburg Law and Economic Center. [Downloadable!]
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