Journal of Regulatory Economics

, Volume 52, Issue 3, pp 285–312 | Cite as

Tariff diversity and competition policy: drivers for broadband adoption in the European Union

Original Article
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Abstract

While second-degree price discrimination is standard in commercial practice in many industries, consumer advocates and public interest groups have reacted with skepticism to tendencies to move away from flat rates and introduce greater tariff diversity. This paper uses time-series data to provide an empirical analysis of how the differentiation of broadband tariffs with respect to retail prices affects fixed broadband subscription. The empirical analysis is based on a unique dataset of 10,200 retail broadband offers spanning the 2003–2011 period and including 23 EU member states. Results show that an increase in tariff diversity provides a significant impetus to broadband adoption, wherefore demands by several public interest groups to limit price discrimination in broadband markets should be viewed with some caution as reduced price discrimination may come at the cost of lower penetration rates.

Keywords

Broadband demand Tariff diversity Price discrimination Dynamic panel data analysis 

JEL Classification

L86 L96 

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Copyright information

© Springer Science+Business Media, LLC 2017

Authors and Affiliations

  1. 1.Faculty of Economics and Business AdministrationGoethe University of Frankfurt a.M.Frankfurt am MainGermany

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