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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)

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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File URL: http://128.118.178.162/eps/io/papers/0504/0504019.pdf
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Bibliographic Info

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

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Length: 24 pages
Date of creation: 18 Apr 2005
Date of revision:
Handle: RePEc:wpa:wuwpio:0504019

Note: Type of Document - pdf; pages: 24
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Web page: http://128.118.178.162

Related research

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

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  1. Jerry A. Hausman & J. Gregory Sidak & HalJ. 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.
  2. Oecd, 2003. "Broadband Driving Growth: Policy Responses," OECD Digital Economy Papers 75, OECD Publishing.
  3. Oecd, 2001. "The Development of Broadband Access in the OECD Countries," OECD Digital Economy Papers 56, OECD Publishing.
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