Thursday, February 19, 2015

The impact of Broadband quality standards on Internet services market structure in Colombia

Julian Hidalgo and Juan Oviedo, both Universidad del Rosario, describe The impact of Broadband quality standards on Internet services market structure in Colombia.

ABSTRACT: This paper develops a structural model which allows estimating the impact of regulatory decisions looking for the setting of download-speed standards on market structure and performance. We characterize a setting under which quality standards improve both service quality and availability. As to quality, we evaluate the impact of quality standards on the performance of local demand from a detailed database of broadband internet subscribers, discriminated by the main attributes of an internet subscription contract as location, supplier, monthly-fee, download- and upload-speed features. From these results, we are able to identify the effect of quality regulation on the behavior of internet providers in a differentiated product! market approach. As a consequence, we are able to assert that the response of internet service providers to quality regulation is a more intense product differentiation that contributes to demand expansion and therefore to improve broadband penetration indicators.

https://lawprofessors.typepad.com/antitrustprof_blog/2015/02/the-impact-of-broadband-quality-standards-on-internet-services-market-structure-in-colombia.html

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