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Free Internet Access and Regulation: A Note

Author

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  • Bipasa Datta
  • Huw Dixon

Abstract

We consider the effect of the regulation of telephony on Haan's [2001] analysis of the economics of free Internet access. Haan considers an unregulated market, and finds that free Internet access is compatible with an efficient outcome and avoids the double marginalization problem. We find that if there is binding price-cap regulation, then free Internet access is never efficient: ISP access charges will be strictly positive. This suggests that either price-cap regulation is nonbinding in the ISP access market, or some other explanation is required.

Suggested Citation

  • Bipasa Datta & Huw Dixon, 2003. "Free Internet Access and Regulation: A Note," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 159(3), pages 594-598, September.
    • Handle: RePEc:mhr:jinste:urn:sici:0932-4569(200309)159:3_594:fiaara_2.0.tx_2-l
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    Cited by:

    1. Bipasa Datta & Yu-Shan Lo, 2013. "To Block or not to Block? Network Competition when Skype enters the Mobile Market," Discussion Papers 13/32, Department of Economics, University of York.

    More about this item

    JEL classification:

    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • L42 - Industrial Organization - - Antitrust Issues and Policies - - - Vertical Restraints; Resale Price Maintenance; Quantity Discounts

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