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Tariff Diversity and Competition Policy: Drivers for Broadband Adoption in the European Union

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  • Lange, Mirjam R.J.

Abstract

While second-degree price discrimination is standard in commercial practice in many industries, consumer advocates and public interest groups have reacted with skepticism against tendencies to move away from flat rates and introduce greater tariff diversity. This paper provides an empirical analysis how the differentiation of broadband tariffs with respect to retail prices affects fixed broadband subscription using time-series data. The empirical analysis is based on a unique dataset of 10,200 retail broadband offers spanning the 2003–2011 period and including 23 EU member states. Results show that an increase in tariff diversity provides a significant impetus to broadband adoption, wherefore demands by some public interest groups to limit price discrimination in broadband markets should be viewed with some caution as reduced price discrimination may come at the cost of lower penetration rates.

Suggested Citation

  • Lange, Mirjam R.J., 2017. "Tariff Diversity and Competition Policy: Drivers for Broadband Adoption in the European Union," 28th European Regional ITS Conference, Passau 2017 169476, International Telecommunications Society (ITS).
  • Handle: RePEc:zbw:itse17:169476
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    Cited by:

    1. Aravantinos, Elias & Petre, Konstantin & Katsianis, Dimitris & Varoutas, Dimitris, 2021. "Determinants of FTTH tariffs evolution in EU: A panel data analysis," Telecommunications Policy, Elsevier, vol. 45(10).
    2. Katz, Raul & Jung, Juan & Callorda, Fernando, 2024. "The role of Video on Demand in stimulating broadband adoption," Telecommunications Policy, Elsevier, vol. 48(4).
    3. Fabian Queder, 2020. "Towards a vertically separated broadband infrastructure: The potential role of voluntary separation," Competition and Regulation in Network Industries, , vol. 21(2), pages 143-165, June.
    4. Leogrande, Angelo & Magaletti, Nicola & Cosoli, Gabriele & Massaro, Alessandro, 2022. "Broadband Price Index in Europe," MPRA Paper 112243, University Library of Munich, Germany.
    5. Leogrande, Angelo & Costantiello, Alberto & Laureti, Lucio, 2021. "The Broadband Penetration in Europe," MPRA Paper 110457, University Library of Munich, Germany.

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    JEL classification:

    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications

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