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

Author

Listed:
  • Evens Salies

    (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po)

  • Jackie Krafft

    (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis (1965 - 2019) - CNRS - Centre National de la Recherche Scientifique - UniCA - Université Côte d'Azur)

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

  • Evens Salies & Jackie Krafft, 2008. "The diffusion of ADSL and costs of switching Internet providers in the broadband industry: Evidence from the French case," Sciences Po Economics Publications (main) hal-03417057, HAL.
    • Handle: RePEc:hal:spmain:hal-03417057
    DOI: 10.1016/j.respol.2008.01.007
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    Citations

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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. Antonelli, Cristiano & Krafft, Jackie & Quatraro, Francesco, 2010. "Recombinant knowledge and growth: The case of ICTs," Structural Change and Economic Dynamics, Elsevier, vol. 21(1), pages 50-69, March.
    3. Jackie Krafft & Francesco Quatraro & Pier Paolo Saviotti, 2014. "The Dynamics of Knowledge-intensive Sectors' Knowledge Base: Evidence from Biotechnology and Telecommunications," Industry and Innovation, Taylor & Francis Journals, vol. 21(3), pages 215-242, April.
    4. Jorge Fernández‐Ruiz, 2019. "A Mixed Duopoly With Switching Costs," The Japanese Economic Review, Japanese Economic Association, vol. 70(2), pages 235-257, June.
    5. repec:spo:wpecon:info:hdl:2441/5l6uh8ogmqildh09h56210pa6 is not listed on IDEAS
    6. repec:spo:wpmain:info:hdl:2441/eu4vqp9ompqllr09hc03jc5h8 is not listed on IDEAS
    7. Evens Salies, 2012. "Product Innovation when Consumers have Switching Costs," Chapters, in: Michael Dietrich & Jackie Krafft (ed.), Handbook on the Economics and Theory of the Firm, chapter 31, Edward Elgar Publishing.
    8. Werner Hölzl, 2015. "Sunk costs and the speed of market selection," Journal of Evolutionary Economics, Springer, vol. 25(2), pages 323-344, April.
    9. Marco Magnani & Fabio M. Manenti & Paola Valbonesi, 2024. "Measuring Switching Costs in the Italian Residential Electricity Market," The Energy Journal, , vol. 45(2), pages 189-208, March.
    10. 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.
    11. Oz Shy, 2024. "Hotelling’s Model with Firms Located Close to Each Other," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 65(3), pages 649-668, November.
    12. Julian Hidalgo & Michelle Sovinsky, 2025. "Subsidies, Speed and Switching? Impacts of an Internet Subsidy in Colombia," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 66(4), pages 419-438, April.
    13. 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).
    14. Jackie Krafft & Francesco Quatraro & Pier-Paolo Saviotti, 2008. "Evolution of the knowledge base in knowledge intensive sectors," Working Papers hal-00264261, HAL.
    15. repec:spo:wpmain:info:hdl:2441/6143 is not listed on IDEAS
    16. repec:spo:wpmain:info:hdl:2441/5l6uh8ogmqildh09h56210pa6 is not listed on IDEAS
    17. Drouard, Joeffrey, 2022. "Content-distribution strategies in markets with locked-in customers," International Journal of Industrial Organization, Elsevier, vol. 80(C).
    18. repec:spo:wpecon:info:hdl:2441/6143 is not listed on IDEAS
    19. Polykalas, Spyros E. & Prezerakos, George N., 2015. "Measuring the impact of market competition analysis process in EU׳s electronic communications sector: Catalyst or impediment towards market competition?," Telecommunications Policy, Elsevier, vol. 39(3), pages 241-252.

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