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The Impact on Broadband Access to the Internet of the Dual Ownership of Telephone and Cable Networks

  • Pedro Pereira

    ()

    (Autoridade da Concorrência)

  • Tiago Ribeiro

    ()

    (Indera)

In Portugal, until recently, the telecommunications incumbent offered broadband access to the Internet, both through digital subscriber line and cable modem. We estimate the impact on broadband access to the Internet of the structural separation of these two businesses. Using a panel of consumer level data and a random effects mixed logit model, we estimate the price elasticities of demand and the marginal costs of broadband access to the Internet. Based on these estimates, we simulate the effect of structural separation on prices and social welfare. Our estimates indicate that structural separation would cause a substantial welfare increase. These results raise questions about the policy of some countries of allowing the dual ownership of telephone and cable networks.

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Paper provided by Portuguese Competition Authority in its series Working Papers with number 17.

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Length: 40 pages
Date of creation: Aug 2006
Date of revision:
Handle: RePEc:pca:wpaper:17
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