Universal Service in the Digital Age: The Commercialization and Geography of U.S. Internet Access

Shane Greenstein

NBER Working Paper No. 6453
Issued in March 1998
NBER Program(s):Productivity, Innovation, and Entrepreneurship

Many analysts anticipate a need to redefine universal service to account for Internet-related services and other combinations of communication and computing. This concern motivates a study of the geographic spread of the commercial Internet Service Provider (ISP) market suppliers of Internet access in the United States. The paper argues that two business models presently vie to diffuse commercially-oriented Internet-access across the US. One business model emphasizes a standardized national service, the other a customized local service. The paper then characterizes the location of over 14,000 access points, local phone numbers offered by commercial ISPs in the spring of 1997. Markets differ widely in their structure competitive to unserved. Just under three quarters of the US population has easy access to commercial Internet service providers, while approximately fifteen percent of the US population has costly access. Urban/rural coverage must be understood in the context of the different strategies of national/local providers.

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Document Object Identifier (DOI): 10.3386/w6453

Published: Greenstein, Shane. "Building And Delivering The Virtual World: Commercializing Services For Internet Access," Journal of Industrial Economics, 2000, v48(4,Dec), 391-411.

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