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The Rise and Fall of Third-party High-speed Access

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  • Gregory L. Rosston

    (Stanford Institute for Economic Policy Research)

Abstract

While Internet usage blossomed during the entire 1995 – 2001 time period, there was a large change in the nature of the high-speed Internet access business. Initially, connection, routing and content were three separate parts of high-speed Internet service. Cable companies initially teamed with affiliated third-party providers to create their highspeed access combination of connection and routing whereas telephone companies resisted working with third-party providers for their high-speed access product. In the end, both cable and telephone providers moved toward a more integrated approach to the provision of high-speed access. However, content has remained, for the most part, separate from connection and routing. This paper finds that changes in the cost of caching, bandwidth and more standardized technical knowledge led cable companies toward the integrated approach favored by telephone companies, and changes in regulation facilitated integrated provision by telephone companies. At the same time, integration of access with content did not provide similar efficiencies and content remains provided for the most part by independent companies.

Suggested Citation

  • Gregory L. Rosston, 2006. "The Rise and Fall of Third-party High-speed Access," Discussion Papers 05-019, Stanford Institute for Economic Policy Research.
    • Handle: RePEc:sip:dpaper:05-019
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    References listed on IDEAS

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    More about this item

    Keywords

    internet; telecommunications; competition; vertical integration;
    All these keywords.

    JEL classification:

    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications

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