Public Policies to Encourage High-Speed Residential Internet Access
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gillett_inet95.pdf
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Author(s)
Gillett, Sharon
Date Issued
June 1995
Abstract
This paper analyzes inter-firm alliances for
providing the home computer user with an
innovative new telecommunications service: a
high-speed connection to the Internet. After
providing an overview of the Internet access
provider industry, it discusses the split of
competencies needed to deliver this new service,
between monopolistic infrastructure (cable and
local telephone) companies and entrepreneurial
Internet service providers. It finds that the
asymmetry in market power between the two
partners holds up the diffusion of this innovation,
and can best be remedied by more open access to
both the subscriber and provider sides of the
cable network, along with increased competition
in all forms of local communications
infrastructure.
policy implications of the analysis. While policy
issues related to market structure have been
discussed in a number of recent studies of the cable
and telephone industries, these writings have
concentrated on traditional video and telephony
services.1 Popular data services such as the Internet
and America OnLine have emerged only recently,
and the role of local infrastructure networks in
providing residential access to these services has
not yet received much attention. Presciently, in
1983 Pool discussed the market structural issues
for residential data services in general terms.2 This
paper builds on and updates his analysis in light of
actual data technologies and services that have
developed in the intervening 12 years, concluding
that more open access to cable networks, on both
the subscriber and provider sides of the network,
would accelerate the diffusion of high-speed
residential Internet access.
Subjects
residential internet access, high-speed, public policy
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