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The cost of switching Internet providers in the broadband industry, or why ADSL has diffused faster than other innovative technologies: Evidence from the French case

  • Jackie Krafft

    (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS : UMR6227 - Université de Nice Sophia-Antipolis)

  • Evens Salies

    (OFCE-DRIC - OFCE)

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 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 in 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.

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Paper provided by HAL in its series Post-Print with number hal-00203512.

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Date of creation: 2008
Date of revision:
Publication status: Published, Research Policy, 2008, 37, 4, 706-719
Handle: RePEc:hal:journl:hal-00203512
Note: View the original document on HAL open archive server: http://hal.archives-ouvertes.fr/hal-00203512/en/
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