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

Pedro Pereira and Tiago Ribeiro ()
Additional contact information
Tiago Ribeiro: Indera, http://ideas.repec.org/e/pri65.html

No 06-10, Working Papers from NET Institute

Abstract: In Portugal, the telecommunications incumbent o®ers broadband access to the Inter- net, both through digital subscriber line and cable modem. In this article, we estimate the impact on broadband access to the Internet of the structural separation of these two businesses. We use a panel of consumer level data and a discrete choice model to estimate the price elasticities of demand and the marginal costs of broadband access to the Internet. Based on these estimates, we simulate the e®ect on prices and social welfare of the structural separation. Our results indicate that the structural separation would lead to substantial price reductions. For broadband clients, on average, each household would save 3:37 euros per month, or 14% of the current price levels. Overall, on average, each household would save 2:73 euros per month, or 14% of the current price levels. We test the robustness of our results in terms of: (i) the estimates of the demand elasticities, (ii) the strategic behavior of the ¯rms, and (iii) the market share estimates. There is no evidence of collusion.

Keywords: Broadband; Structural Separation; Prices (search for similar items in EconPapers)
JEL-codes: L25 L51 L96 (search for similar items in EconPapers)
Pages: 41 pages
Date: 2006-08, Revised 2006-08
New Economics Papers: this item is included in nep-dcm, nep-ict, nep-ipr, nep-pr~, nep-law, nep-mic, nep-net and nep-tid
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Citations: View citations in EconPapers (8)

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Related works:
Journal Article: The impact on broadband access to the Internet of the dual ownership of telephone and cable networks (2011)
Working Paper: The Impact on Broadband Access to the Internet of the Dual Ownership of Telephone and Cable Networks (2006)
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