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Regulation of Internet Access

  • Sue Mialon
  • Samiran Banerjee

We analyze the welfare implication of regulating the price of last-mile access to consumers provided by local Internet service providers (ISPs). We consider a new two-sided market model that highlights the vertical relationship between two platforms, a local ISP and a large content provider called a Content Network Platform (CNP) that plays the role of platform in the content markets. The welfare implication of regulating the Internet access depends on which of the two platforms holds a dominant factor in creating consumer demand for the Internet. If the ISP's Internet subscription price is the dominant factor, regulation alleviates inefficiencies due to the ISP's market power and, thus, is likely to improve welfare.

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File URL: http://economics.emory.edu/home/assets/workingpapers/smialon_12_01_paper.pdf
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Paper provided by Department of Economics, Emory University (Atlanta) in its series Emory Economics with number 1201.

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Date of creation: Jan 2012
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Handle: RePEc:emo:wp2003:1201
Contact details of provider: Web page: http://economics.emory.edu/home/journals/
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  1. Jean-Charles Rochet & Jean Triole, 2002. "Platform competition in two sided markets," LSE Research Online Documents on Economics 24929, London School of Economics and Political Science, LSE Library.
  2. E. Glen Weyl, 2010. "A Price Theory of Multi-sided Platforms," American Economic Review, American Economic Association, vol. 100(4), pages 1642-72, September.
  3. Caillaud, Bernard & Jullien, Bruno, 2003. " Chicken & Egg: Competition among Intermediation Service Providers," RAND Journal of Economics, The RAND Corporation, vol. 34(2), pages 309-28, Summer.
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