This paper assesses the effect of standardization on competition in the US cable modem market. The standardization process in this market has involved two competing standardization groups, a commercial consortium (Multimedia Cable Network System Partners Ltd) and an official organization (the Institute of Electrical and Electronics Engineers working group IEEE 802.14). In such circumstances, standardization related activities might affect competition both within a standardization group and between standards. The paper distinguishes between these effects based on firms’ membership in standardization groups, and uses event study methodology to assess the effects of standardization activities on competition as perceived by investors. The results imply that not all consortium-led standardization activities were perceived to increase inter-firm competition.
Read full abstract