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Gigabit Fiber Networks & Speed Competition in the United States: Cross-Sectional Analysis at the Census Block Level

In the past few years, investment in and construction of fiber gigabit broadband networks has grown substantially in the United States. Entry of these firms to many U.S. cities presents a good opportunity to research the effects of increased competition among broadband providers. This paper uses spatial analysis to evaluate the effects of the entry of fiber gigabit providers on maximum download speeds by estimating the spatial relation of aDSL and cable providers to the nearest fiber gigabit provider. We use broadband provider data at the census block level from 10 U.S. states, which allows for a more accurate measure of competition than previous papers. We find that the spatial relationship between aDSL providers and their nearest fiber gigabit competitor has little impact on download speeds offered by aDSL providers, after controlling for competition, income and housing density. On the other hand, we find that the presence of nearby fiber gigabit providers has a significant and positive effect on the average download speed offered to consumers by cable providers. These contrasting results highlight the different ways broadband providers compete with faster competitors and the importance of distinguishing between these different modes of competition in research on the subject of broadband competition.