PP958
Analítico de Periódico
MENDEZ, Samara, e outros
The impacts of the lifeline subsidy on high-speed Internet access / Samara Mendez, Gabor Molnar, Scott J. Savage
The Journal of Law & Economics, v.64 n.4 (November 2021), p.745-782
INFORMÁTICA / EUA, INTERNET, PREÇOS, LIMITE DE VELOCIDADE
This paper evaluates the impacts of the Lifeline subsidy on high-speed Internet prices, demand, and welfare. Results show that low-income households would require large price reductions to subscribe to basic broadband. Simulations of competition between cable and telephone firms show that the $9.25 subsidy lowers the prices for low-quality plans and incentivizes about 6 percent of low-income households to take up high-speed Internet. When firms price discriminate by charging different prices to low- and high-income households choosing the same plan, about 25 percent of low-income households enter the market and consume high-speed Internet. When the social planner sets prices and price discriminates, 68 percent of low-income households enter the market, and more higher-speed plans are consumed.