The Impacts of the Lifeline Subsidy on High-Speed Internet Access

Samara Mendez, Gabor Molnar and Scott J. Savage

Journal of Law and Economics, 2021, vol. 64, issue 4, 745 - 782

Abstract: This paper evaluates the impacts of the Lifeline subsidy on high-speed Internet prices, demand, and welfare. Results show that low-income households would require large price reductions to subscribe to basic broadband. Simulations of competition between cable and telephone firms show that the $9.25 subsidy lowers the prices for low-quality plans and incentivizes about 6 percent of low-income households to take up high-speed Internet. When firms price discriminate by charging different prices to low- and high-income households choosing the same plan, about 25 percent of low-income households enter the market and consume high-speed Internet. When the social planner sets prices and price discriminates, 68 percent of low-income households enter the market, and more higher-speed plans are consumed.

Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://dx.doi.org/10.1086/714504 (application/pdf)
http://dx.doi.org/10.1086/714504 (text/html)
Access to the online full text or PDF requires a subscription.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ucp:jlawec:doi:10.1086/714504

Access Statistics for this article

More articles in Journal of Law and Economics from University of Chicago Press
Bibliographic data for series maintained by Journals Division ().