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Title:Cost and Benefits from Infrastructure Competition : Estimating Welfare Effects from Broadband Access Competition PDF Logo
Authors:Höffler, Felix
Issue Date:2005
Series/Report no.:Preprints of the Max Planck Institute for Research on Collective Goods 2005/1
Abstract:Competition between parallel infrastructures incorporates opposing welfare effects. The gain from reduced deadweight loss might be out- weighed by the inefficient duplication of an existing infrastructure. Using data from broadband internet access for Western Europe 2000-2004, this paper investigates which e¤ect prevails empirically. Infrastructure competition between DSL and cable TV had a significant and positive impact on the broadband penetration. Comparing the additional social surplus attributable to cable competition with the cable investments, we conclude that infrastructure competition has not been welfare enhancing. A theoretical model is provided, formalizing why the e¤ect of competition on penetration might be limited.
Subjects:Infrastructure Competition
Service Competition
Broadband
Internet
Cable TV
DSL
JEL:L96
L12
L51
K23
L86
Document Type:Working Paper
Appears in Collections:Preprints of the Max Planck Institute for Research on Collective Goods

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