Competitive Effects of Fixed Wireless Access on Wireline Broadband Technologies

Singer Hal J. and Urschel Augustus H. ()
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Singer Hal J.: Econ One, Los Angeles, USA
Urschel Augustus H.: Econ One, Los Angeles, USA

Review of Network Economics, 2023, vol. 22, issue 4, 241-283

Abstract: In this paper, we investigate the potential consumer savings to U.S. home broadband consumers in cable modem monopoly markets, should fixed wireless access technologies become available as a competitive alternative. We use a Choice-Based Conjoint survey and Hierarchical Bayes estimation to calculate the proportion of home broadband consumers that would switch to a fixed wireless access option if it was made available in a cable modem monopoly market. We then utilize a monopoly pricing model to estimate the downward pricing pressure this competition would place on incumbent cable modem monopoly prices. We find that fixed wireless entry at current prices would convert 18 percent of cable-only households and lead to a 37 percent reduction in the price of cable modem service. We also find entry into non-monopoly markets where a fiber-optic broadband alternative already exists, and find muted conversion rates and price reductions. Our results indicate that the deployment of fixed-wireless access would generate substantial consumer savings in cable modem monopoly markets, which constitute 30 precent all cable modem subscribers in the United States.

Keywords: fixed wireless; choice based conjoint; broadband; market simulation; cable monopoly (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1515/rne-2023-0054

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