Handbook on the Economics of the Media
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Handbook on the Economics of the Media

Edited by Robert G. Picard and Steve S. Wildman

This Handbook explores the economic features of the media and its infrastructure to provide readers with a sophisticated understanding of the critical issues and their influence on companies, audiences and regulators. The contributors explore and explain the impact of underlying factors such as multi-sided platforms, advertising and industry structure. They assess the unique economic factors affecting print, broadcast and broadband-based media, and highlight how the economics of the media can influence policy making. Each original chapter introduces the reader to a specific topic, reviews the literature on the development of knowledge in the field, explores critiques of the approach, and provides an understanding of applying this knowledge and the implications.
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Chapter 9: The economics of broadband

Benjamin J. Bates, Nick Geidner and Yi-Xi Zhu


“Broadband” generally refers to high-speed (or high-bandwidth) digital data networks connected to the Internet and its available content and services. What speed/capacity qualifies as “broadband” is an evolving standard. And while broadband networks have previously referred primarily to wired networks, wireless data networks have become an increasingly important in-house wireless extension of broadband, and are starting to develop as viable regional wireless broadband networks (through 4G mobile systems, as well as dedicated wireless broadband data services). Still, the fundamental economics of telecommunication/data networks and the economics of the Internet apply regardless of speed – fixed costs for infrastructure are fairly high (although falling over time), particularly compared to operating (variable) costs, leading to generally falling average costs (at least to the point of network saturation), and generally high economies of scale in terms of infrastructure; the presence of network economies on the demand side; the quasi-public good nature of both networks and content services and accompanying pricing issues; and so on. Of course, the desired bandwidth will impact the specific costs of any particular broadband system, as will a number of other factors. On the demand side, the wealth of content and services available online have created a substantial demand for access. Expanding access speeds open up markets for high bandwidth content and services such as higher quality video streams and interactive online gaming.

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