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Innovation and the Evolution of Market Structure for Internet Access in the United States

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  • Shane Greenstein

    (Kellogg School of Management, Northwestern University)

Abstract

How and why did the U.S. commercial Internet access market structure evolve during its first decade? Commercial Internet access market structure arose from a propitious combination of inherited market structures from communications and computing, where a variety of firms already flourished and entrepreneurial norms prevailed. This setting nurtured innovative behavior across such key features as pricing, operational practices, and geographic coverage. Inherited regulatory decisions in communications markets had a nurturing effect on innovative activity. On-going regulatory decisions also shaped the market’s evolution, sometimes nurturing innovation and sometimes not. This narrative and analysis informs conjectures about several unique features of U.S. market structure and innovative behavior. It also informs policy debates today about the role of regulation in nurturing or discouraging innovation behavior.

Suggested Citation

  • Shane Greenstein, 2006. "Innovation and the Evolution of Market Structure for Internet Access in the United States," Discussion Papers 05-018, Stanford Institute for Economic Policy Research.
    • Handle: RePEc:sip:dpaper:05-018
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    File URL: http://www-siepr.stanford.edu/repec/sip/05-018.pdf
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    References listed on IDEAS

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    14. Greg Stranger & Shane Greenstein, 2007. "Pricing at the On-Ramp to the Internet: Price Indexes for ISPs during the 1990s," NBER Chapters, in: Hard-to-Measure Goods and Services: Essays in Honor of Zvi Griliches, pages 197-233, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Christiaan Hogendorn, 2007. "Broadband Internet: net neutrality versus open access," International Economics and Economic Policy, Springer, vol. 4(2), pages 185-208, August.
    2. Shane Greenstein, 2011. "Nurturing the Accumulation of Innovations: Lessons from the Internet," NBER Chapters, in: Accelerating Energy Innovation: Insights from Multiple Sectors, pages 189-223, National Bureau of Economic Research, Inc.

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