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The Rise and Fall of Third-party High-speed Access (Revised August 2008)

Aug 2006
Working Paper
By  Gregory Rosston
While Internet usage blossomed during the entire 1995-2001 time period, there was a large change in the nature of the high-speed Internet access business. Cable companies initially teamed with a third party provider, @Home, to create their highspeed access offering. Telephone companies resisted working with third party providers for their high-speed access product. In the end, both cable and telephone providers moved toward a more integrated approach to the sale of high-speed access. Changes in the marketplace help to explain why the cable companies moved toward the telephone company approach. The recent announcement by AOL that intends to move away from access provision toward a content-based model is consistent with the economic forces that were at play in the earlier time periods.