Measuring incumbent ISP response to municipal broadband opt-out referenda in Colorado

This paper examines how the quality of Internet service from existing providers is affected when voters in Colorado approve referenda eliminating a barrier to their local governments providing broadband service. Using a difference-in-differences framework, the research design exploits variation in the timing of a community’s approval of a referendum in order to examine whether incumbent private providers adjust their speed offerings in response to the signal that public entry is more likely. I find no evidence that cable providers’ upgrading behavior responds to the passage of a referendum. However, after a municipality passes a referendum, the largest DSL provider in the state offers speeds in that local area 11%–26% lower than what they would have been otherwise. I find weak evidence that small-time DSL providers substantially upgrade speeds after a referendum passes. Analyses of a referendum’s effect on subscription rates are inconclusive.