ISP Market
Changing market Structures and Competitive Forces in the Internet Service Provider (ISP) Industry
The Internet went from being practically unheard of in the 1980s and early 1990s to being accessible in most of the homes and even on the phones of many people in the developed world just twenty years later. During that period of time, the industry of providing this access to consumers, the Internet Service Provider or ISP industry, has gone through many significant market changes. As the ISP market and industry has changed structure, there have been practical and financial effects on consumers as well as on the ISP companies and other related businesses, and indeed it is hard to imagine an industry with more significant volatility in the past two decades. The following pages will explore this volatility -- both the specific market changes and their impact -- as a means of exploring the general principles and problems of market structure and the mechanisms by which they operate.
Patterns of Change in ISPs
The ISP industry has changed dramatically over its relatively short life span, with very few options and one clear market leader in the early days of a large and increasing consumer market, a proliferation of providers a decade in, and now a consistent move towards consolidation (Waterman & Choi, 2010). In many markets, there is a monopoly or near-monopoly of Internet service provision tied to cable television provision (Faulhaber, 2010; Waterman & Choi, 2010). This has had a significant impact on consumers and on ISP industry operators themselves.
Hypothetical Short- And Long-Run Behaviors
Some of the behaviors of ISP's and the ISP market are easy to predict given the similarities...
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