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The rise and fall of third-party high-speed access

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  • Rosston, Gregory L.

Abstract

While Internet usage blossomed during the entire 1995-2001 time period, there was a large change in the nature of the high-speed Internet access business. Initially, connection, routing and content were three separate parts of high-speed Internet service. Cable companies initially teamed with affiliated third-party providers to create their high-speed access combination of connection and routing whereas telephone companies resisted working with third-party providers for their high-speed access product. In the end, both cable and telephone providers moved toward a more integrated approach to the provision of high-speed access. However, content has remained, for the most part, separate from connection and routing. This paper finds that changes in the cost of caching, bandwidth and more standardized technical knowledge led cable companies toward the integrated approach favored by telephone companies, and changes in regulation facilitated integrated provision by telephone companies. At the same time, integration of access with content did not provide similar efficiencies and, for the most part, content remains provided for by independent companies.

Suggested Citation

  • Rosston, Gregory L., 2009. "The rise and fall of third-party high-speed access," Information Economics and Policy, Elsevier, vol. 21(1), pages 21-33, February.
  • Handle: RePEc:eee:iepoli:v:21:y:2009:i:1:p:21-33
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    References listed on IDEAS

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    1. Rubinfeld, Daniel L & Singer, Hal J, 2001. "Vertical Foreclosure in Broadband Access?," Journal of Industrial Economics, Wiley Blackwell, vol. 49(3), pages 299-318, September.
    2. repec:reg:rpubli:214 is not listed on IDEAS
    3. Bresnahan, Timothy F & Greenstein, Shane, 1999. "Technological Competition and the Structure of the Computer Industry," Journal of Industrial Economics, Wiley Blackwell, vol. 47(1), pages 1-40, March.
    4. Noam, Eli M., 2006. "Fundamental instability: Why telecom is becoming a cyclical and oligopolistic industry," Information Economics and Policy, Elsevier, vol. 18(3), pages 272-284, September.
    5. Tom Downes & Shane Greenstein, 2000. "Universal Access and Local Commercial Internet Markets," Discussion Papers Series, Department of Economics, Tufts University 0017, Department of Economics, Tufts University.
    6. J. Gregory Sidak & William Baumol, 1994. "Toward Competition in Local Telephony," Books, American Enterprise Institute, number 52984.
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