Cost and Benefits from Infrastructure Competition. Estimating Welfare Effects 
from Broadband Access Competition

Höffler, Felix

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Cost and Benefits from Infrastructure Competition. Estimating Welfare Effects from Broadband Access Competition

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Höffler, Felix
Max Planck Institute for Research on Collective Goods, Max Planck Society;

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http://www.coll.mpg.de/pdf_dat/2005_01online.pdf
(Preprint)

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Zitation

Höffler, F. (2005). Cost and Benefits from Infrastructure Competition. Estimating Welfare Effects from Broadband Access Competition.

Zitierlink: https://hdl.handle.net/11858/00-001M-0000-0028-6EB0-3

Zusammenfassung

Competition between parallel infrastructures incorporates opposing welfare effects. The gain from reduced deadweight loss might be outweighed by the inefficient duplication of an existing infrastructure. Using data from broadband internet access for Western Europe 2000-2004, this paper investigates which effect prevails empirically. Infrastructure competition between DSL and cable TV had a significant and positive impact on the broadband penetration. Comparing the additional social surplus attributable to cable competition with the cable investments, we conclude that infrastructure competition has not been welfare enhancing. A theoretical model is provided, formalizing why the effect of competition on penetration might be limited.