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‘How Different is Wireless Access? Implications for Internet Mergers

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  • Giovannetti, E.

Abstract

Network hierarchies in the Internet are often not fixed: two providers can be simultaneously input supplier and retailer in a routing process, while being horizontally competing in another. We introduce a stylised network model capturing these aspects of the Internet to study the impact of differentiation introduced by wireless access on prices and profits. We then study the incentives for, and welfare impact of, a merger between the wireless provider and a local bottleneck fixed access one. These effects crucially depend on the degree of differentiation between the wireless and fixed Internet access modalities. Pricing, at each router, follows the motorway toll metaphor.

Suggested Citation

  • Giovannetti, E., 2003. "‘How Different is Wireless Access? Implications for Internet Mergers," Cambridge Working Papers in Economics 0307, Faculty of Economics, University of Cambridge.
    • Handle: RePEc:cam:camdae:0307
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    References listed on IDEAS

    as
    1. Armstrong, Mark & Doyle, Chris & Vickers, John, 1996. "The Access Pricing Problem: A Synthesis," Journal of Industrial Economics, Wiley Blackwell, vol. 44(2), pages 131-150, June.
    2. Armstrong, Mark, 2001. "The theory of access pricing and interconnection," MPRA Paper 15608, University Library of Munich, Germany.
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    6. Giovannetti, Emanuele, 2002. "Interconnection, differentiation and bottlenecks in the Internet," Information Economics and Policy, Elsevier, vol. 14(3), pages 385-404, September.
    7. Mackie-Mason, J.K. & Varian, H.R., 1993. "Pricing the Internet," Memorandum 1993_020, Oslo University, Department of Economics.
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    Cited by:

    1. D'Ignazio, A. & Giovannetti, E., 2004. "From Exogenous to Endogenous Networks: Internet Applications," Cambridge Working Papers in Economics 0445, Faculty of Economics, University of Cambridge.

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    More about this item

    Keywords

    mergers; internet; network industries; wireless access;
    All these keywords.

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications

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