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The Effect of Access Regulation on Broadbnd Deployment

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  • Amitay Alter

    (Stanford University)

Abstract

This paper quetions whether or not mandatory unbundling delayed DSL deployment by BellSouth. By exploiting a law change in Kentucky and variation in access prices across markets, I find that deregulation in Kentucky triggered deployment, but no evidence that access prices affected deployment pace. An upper bound on the welfare loss due to late deployment in rural markets is $21 million. The findings are consistent with a positive effect of deregulation on the profitability of upgrades, but can also result from a strategic delay which is part of the bargaining between the firm and the regulator.

Suggested Citation

  • Amitay Alter, 2006. "The Effect of Access Regulation on Broadbnd Deployment," Discussion Papers 06-017, Stanford Institute for Economic Policy Research.
    • Handle: RePEc:sip:dpaper:06-017
    as

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    File URL: http://www-siepr.stanford.edu/repec/sip/06-017.pdf
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    References listed on IDEAS

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    1. repec:reg:rpubli:337 is not listed on IDEAS
    2. Crandall Robert W. & Ingraham Allan T & Singer Hal J, 2004. "Do Unbundling Policies Discourage CLEC Facilities-Based Investment," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 4(1), pages 1-25, June.
    3. Augereau, Angelique & Greenstein, Shane, 2001. "The need for speed in emerging communications markets: upgrades to advanced technology at Internet Service Providers," International Journal of Industrial Organization, Elsevier, vol. 19(7), pages 1085-1102, July.
    4. Robert S. Pindyck, 2005. "Pricing Capital Under Mandatory Unbundling and Facilities Sharing," NBER Working Papers 11225, National Bureau of Economic Research, Inc.
    5. James E. Prieger, 2003. "The Supply Side of the Digital Divide: Is There Equal Availability in the Broadband Internet Access Market?," Economic Inquiry, Western Economic Association International, vol. 41(2), pages 346-363, April.
    6. James E. Prieger, 2003. "The Supply Side of the Digital Divide: Is There Equal Availability in the Broadband Internet Access Market?," Economic Inquiry, Western Economic Association International, vol. 41(2), pages 346-363, April.
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    More about this item

    Keywords

    Access regulation; Broadband; Hazard model; Technology adoption;
    All these keywords.

    JEL classification:

    • L42 - Industrial Organization - - Antitrust Issues and Policies - - - Vertical Restraints; Resale Price Maintenance; Quantity Discounts
    • L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications

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