Natural Experiments in U.S. Broadband Regulation
Thomas Hazlett and
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Caliskan Anil: Information Economy Project, George Mason University
Review of Network Economics, 2008, vol. 7, issue 4, 1-21
Regulations governing broadband networks are being considered. Natural experiments conducted with respect to "open access" rules yield probative marketplace evidence. Using the metric of subscribership, policy regimes are compared. Prior to 1Q2003, cable modem service was unregulated (and has remained so), while digital subscriber lines (DSL) were subject to network unbundling mandates. Those rules were effectively lifted in 1Q2003 and 3Q2005. Across regimes, subscriber growth appears significantly and negatively correlated with regulation. By year-end 2006, DSL subscribership was about 65% above the trend established in the regulated pre-1Q2003 era, a difference of eight to ten million households.
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