Residential Demand for Broadband Telecommunications and Consumer Access to Unaffiliated Internet Content Providers

45 Pages Posted: 30 Apr 2001

See all articles by J. Gregory Sidak

J. Gregory Sidak

Criterion Economics, L.L.C.

Hal J. Singer

Econ One

Jerry A. Hausman

Massachusetts Institute of Technology (MIT) - Department of Economics; National Bureau of Economic Research (NBER)

Abstract

In this article, we examine the open access debate in the context of cable services and broadband Internet services from an antitrust framework. Our analysis is prompted by the recent AT&T-MediaOne and AOL-Time Warner mergers, which raise issues concerning the impact of integrated cable content and Internet access to residential telecommunications. Economic analysis, demographic surveys and federal antitrust guidelines each indicate that the broadband Internet access market is distinct from the narrowband Internet access market. Emerging or competing technologies, such as satellite Internet services or digital subscriber lines, cannot discipline the broadband Internet access market over the relevant time horizons. Vertical integration increases the incentives and power of cable providers to discriminate against unaffiliated broadband content, thereby substantially decreasing consumer welfare. We conclude that the recent mergers of cable content and Internet access is the most current manifestation of the classic strategy of cable providers to control alternate channels of content distribution.

JEL Classification: KO, K2, L4, L5, L9, K21, K23, L51

Suggested Citation

Sidak, J. Gregory and Singer, Hal J. and Hausman, Jerry A., Residential Demand for Broadband Telecommunications and Consumer Access to Unaffiliated Internet Content Providers. Yale Journal on Regulation, Vol. 18, No. 1, pp. 129-173, 2001. Available at SSRN: https://ssrn.com/abstract=268512 or http://dx.doi.org/10.2139/ssrn.268512

J. Gregory Sidak (Contact Author)

Criterion Economics, L.L.C. ( email )

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Hal J. Singer

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Jerry A. Hausman

Massachusetts Institute of Technology (MIT) - Department of Economics ( email )

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National Bureau of Economic Research (NBER)

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