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The diffusion of ADSL and costs of switching Internet providers in the broadband industry: Evidence from the French case

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  • Krafft, Jackie
  • Salies, Evens

Abstract

The innovative broadband Internet industry is characterised by inertia phenomena in terms of technology choice, as well as selection of Internet service providers (ISPs). Within the set of firms providing the Internet, very often in Europe the incumbent operator has the lion's share of end-customers and supplies the dominant technology. Focusing on the French case, this paper shows that although inertia on the supply side (partly due to the regulation process itself), helps to explain the technology mix reached to date, a more complete picture of the inertia can be obtained when we consider the existence of costs faced by customers when switching between ISPs. We calculate these so-called "switching costs". The closing section of this paper derives several implications in terms of policy.

Suggested Citation

  • Krafft, Jackie & Salies, Evens, 2008. "The diffusion of ADSL and costs of switching Internet providers in the broadband industry: Evidence from the French case," Research Policy, Elsevier, vol. 37(4), pages 706-719, May.
  • Handle: RePEc:eee:respol:v:37:y:2008:i:4:p:706-719
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    Cited by:

    1. Jackie Krafft & Evens Salies, 2008. "Why and how should innovative industries with high consumer switching costs be re-regulated?," Documents de Travail de l'OFCE 2008-04, Observatoire Francais des Conjonctures Economiques (OFCE).
    2. repec:spo:wpecon:info:hdl:2441/5l6uh8ogmqildh09h56210pa6 is not listed on IDEAS
    3. Evens Salies, 2012. "Product Innovation when Consumers have Switching Costs," Chapters,in: Handbook on the Economics and Theory of the Firm, chapter 31 Edward Elgar Publishing.
    4. Evens Salies, 2011. "Product innovation when consumers have switching costs," Working Papers hal-01069477, HAL.
    5. Sadowski, Bert M., 2017. "Advanced users and the adoption of high speed broadband: Results of a living lab study in the Netherlands," Technological Forecasting and Social Change, Elsevier, vol. 115(C), pages 1-14.
    6. Bender, Christian M. & Götz, Georg, 2010. "Coexistence of service- and facility-based competition: The relevance of access prices for "make-or-buy"-decisions," 21st European Regional ITS Conference, Copenhagen 2010: Telecommunications at new crossroads - Changing value configurations, user roles, and regulation 3, International Telecommunications Society (ITS).

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