Differentiation Across Standards and Adoption Failure in 56k Modems
NET Institute Working Paper No. 03-12
42 Pages Posted: 29 Aug 2004
Date Written: February 13, 2004
56K modems were introduced under two competing incompatible standards. We show the importance of competition between Internet Service Providers in the adoption process. We show that ISP's were less likely to adopt the technology that more competitors adopted. This result is particularly striking given that industry participants expected coordination on one standard or the other. We speculate about the role of ISP differentiation in preventing the market from achieving standardization until a government organization intervened.
JEL Classification: L15, L63, L86
Suggested Citation: Suggested Citation