The Rise and Fall of Third-Party High-Speed Access

Information, Economics and Policy, Forthcoming

SIEPR Discussion Paper No. 05-19

43 Pages Posted: 9 Nov 2006 Last revised: 23 Dec 2013

See all articles by Gregory L. Rosston

Gregory L. Rosston

Stanford Institute for Economic Policy Research

Date Written: August 25, 2008

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 high-speed 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.

Keywords: Internet, telecommunications, competition, vertical integration

JEL Classification: L22, L24, L96

Suggested Citation

Rosston, Gregory L., The Rise and Fall of Third-Party High-Speed Access (August 25, 2008). SIEPR Discussion Paper No. 05-19; SIEPR Discussion Paper No. 05-19. Available at SSRN: https://ssrn.com/abstract=943570 or http://dx.doi.org/10.2139/ssrn.943570

Gregory L. Rosston (Contact Author)

Stanford Institute for Economic Policy Research ( email )

Landau Economics Building
579 Serra Mall at Galvez St.
Stanford, CA 94305-6015
United States

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