Abstract The economics literature on Net Neutrality (NN) has been largely critical of NN regulation on the basis of theoretical findings that NN violations can be both welfare improving and welfare deteriorating, depending on the circumstances of the case in question. Thus, an ex post competition policy approach would be preferable to a strict ex ante prohibition of NN violations. In contrast, the current paper argues that NN regulation is largely ineffective, in particular, when it comes to the prohibition of fast lanes and other quality of service (QoS) differentiations, and to a lesser extent, when it comes to the zero price rule. NN regulation is only effective in preventing the blocking of specific content and in preventing the favoring of ISP owned content and in preventing some price discriminations. These are also areas where NN regulations are more likely to be welfare-enhancing. Where they are ineffective, NN regulations are likely to create inefficiencies through the cost and allocative inefficiencies caused by NN bypass. The paper ends with a call for theoretical and empirical economic analyses of NN circumvention techniques.
{"title":"Net Neutrality Regulation: Much Ado about Nothing?","authors":"Ingo Vogelsang","doi":"10.1515/rne-2018-0051","DOIUrl":"https://doi.org/10.1515/rne-2018-0051","url":null,"abstract":"Abstract The economics literature on Net Neutrality (NN) has been largely critical of NN regulation on the basis of theoretical findings that NN violations can be both welfare improving and welfare deteriorating, depending on the circumstances of the case in question. Thus, an ex post competition policy approach would be preferable to a strict ex ante prohibition of NN violations. In contrast, the current paper argues that NN regulation is largely ineffective, in particular, when it comes to the prohibition of fast lanes and other quality of service (QoS) differentiations, and to a lesser extent, when it comes to the zero price rule. NN regulation is only effective in preventing the blocking of specific content and in preventing the favoring of ISP owned content and in preventing some price discriminations. These are also areas where NN regulations are more likely to be welfare-enhancing. Where they are ineffective, NN regulations are likely to create inefficiencies through the cost and allocative inefficiencies caused by NN bypass. The paper ends with a call for theoretical and empirical economic analyses of NN circumvention techniques.","PeriodicalId":45659,"journal":{"name":"Review of Network Economics","volume":"9 1","pages":""},"PeriodicalIF":0.7,"publicationDate":"2018-09-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138540306","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This special issue presents five selected contributions from well-known scholars and policy experts to provide both academia and policy makers from the ICT sector with an overview of the economic impacts of recent net neutrality policy changes in the EU and the US. In both jurisdictions, fundamental policy shifts have been implemented in the last two decades with lengthy and controversial decision-making processes with strong political party affiliations on both sides of the Atlantic. This issue focuses on the history of net neutrality policy making in the EUand theUSwith a particular emphasis on themore recent 2015–2018 period duringwhichmajor policy changes occurred: The European net neutrality legislation was enacted in 2015. Its aim is to “guarantee the continued functioning of the internet ecosystem as an engine of innovation” by imposing net neutrality policies that prohibit any discriminatory uses of networkmanagement practices (such as blocking or throttling of lawful content) by Internet access service providers. In 2015, the US regulatory authority (Federal Communications Commission, FCC) enacted its 2015 Open Internet Order, in which the agency imposed the heavyhanded approach of adopting the 1930s-era rules for regulating monopoly telephone companies on broadband services. According to the Open Internet Order, strict net neutrality rules prohibit blocking, throttling and paid prioritization. Similar to the reasoning in the EU, the Open Internet Order should enhance a virtuous circle where “innovations at the edges of the network enhance consumer demand, leading to expanded investments in broadband infrastructure that, in turn, spark new innovations at the edge.” In 2017, the Federal Communications Commission’s Restoring Internet Freedom Order reversed its 2015 decision. Since then the regulatory regime in the US differs fundamentally from the rather strict regulations imposed in the EU.
{"title":"Special Issue on “Recent Net Neutrality Polices in Europe and the US”","authors":"Wolfgang Briglauer","doi":"10.1515/rne-2019-0029","DOIUrl":"https://doi.org/10.1515/rne-2019-0029","url":null,"abstract":"This special issue presents five selected contributions from well-known scholars and policy experts to provide both academia and policy makers from the ICT sector with an overview of the economic impacts of recent net neutrality policy changes in the EU and the US. In both jurisdictions, fundamental policy shifts have been implemented in the last two decades with lengthy and controversial decision-making processes with strong political party affiliations on both sides of the Atlantic. This issue focuses on the history of net neutrality policy making in the EUand theUSwith a particular emphasis on themore recent 2015–2018 period duringwhichmajor policy changes occurred: The European net neutrality legislation was enacted in 2015. Its aim is to “guarantee the continued functioning of the internet ecosystem as an engine of innovation” by imposing net neutrality policies that prohibit any discriminatory uses of networkmanagement practices (such as blocking or throttling of lawful content) by Internet access service providers. In 2015, the US regulatory authority (Federal Communications Commission, FCC) enacted its 2015 Open Internet Order, in which the agency imposed the heavyhanded approach of adopting the 1930s-era rules for regulating monopoly telephone companies on broadband services. According to the Open Internet Order, strict net neutrality rules prohibit blocking, throttling and paid prioritization. Similar to the reasoning in the EU, the Open Internet Order should enhance a virtuous circle where “innovations at the edges of the network enhance consumer demand, leading to expanded investments in broadband infrastructure that, in turn, spark new innovations at the edge.” In 2017, the Federal Communications Commission’s Restoring Internet Freedom Order reversed its 2015 decision. Since then the regulatory regime in the US differs fundamentally from the rather strict regulations imposed in the EU.","PeriodicalId":45659,"journal":{"name":"Review of Network Economics","volume":"3 1","pages":"109 - 114"},"PeriodicalIF":0.7,"publicationDate":"2018-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"88308520","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract Network neutrality for the Internet has been a fiercely debated topic for more than 15 years. Arguably spurred by recent regulatory actions in the US and the tremendous ecosystem evolution as characterized by the emergence and growing importance of global cloud platforms as well as the Internet of Things, the debate has recently seen a resurgence. This paper describes the origins and development of the regulatory stance towards network neutrality in the US and the EU. Against the background of the diverse evolutionary forces that shape the ecosystem, we examine network neutrality regulation through the lens of network economics. In doing so, we describe a series of challenges and misconceptions associated with current regulations and expound the requirement for a market-driven understanding of network neutrality.
{"title":"Network Neutrality Through the Lens of Network Economics","authors":"Volker Stocker, Guenter Knieps","doi":"10.1515/rne-2019-0025","DOIUrl":"https://doi.org/10.1515/rne-2019-0025","url":null,"abstract":"Abstract Network neutrality for the Internet has been a fiercely debated topic for more than 15 years. Arguably spurred by recent regulatory actions in the US and the tremendous ecosystem evolution as characterized by the emergence and growing importance of global cloud platforms as well as the Internet of Things, the debate has recently seen a resurgence. This paper describes the origins and development of the regulatory stance towards network neutrality in the US and the EU. Against the background of the diverse evolutionary forces that shape the ecosystem, we examine network neutrality regulation through the lens of network economics. In doing so, we describe a series of challenges and misconceptions associated with current regulations and expound the requirement for a market-driven understanding of network neutrality.","PeriodicalId":45659,"journal":{"name":"Review of Network Economics","volume":"102 1","pages":"115 - 150"},"PeriodicalIF":0.7,"publicationDate":"2018-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"80623270","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract In 2018, the Federal Communications Commission’s Restoring Internet Freedom Order reversed its 2015 decision to apply common carrier regulation to broadband Internet access services under Title II of the Communications Act of 1934. Empirical evidence indicating negative investment effects of the regulation played a key role in this reversal, though the quantification of these investment effects were a matter of substantial controversy. This article surveys the studies cited in the recent decision and the Commission’s scrutiny of them. In all, the Commission considered eight primary works but relied on only two of them, a culling process that relied on four principles: (1) simply comparing outcomes before-and-after an event is not a valid impact analysis; (2) before-and-after comparisons are more probative if regression analysis is used to condition the outcomes by accounting for potentially relevant factors like economic growth, sales, and so forth; (3) the causal effects of a regulation are best determined with reference to a counterfactual; and (4) the application of proper methods does not excuse the use of bad data. These principles are mostly uncontroversial and are consistent with the modern practice of impact analysis.
{"title":"Net Neutrality and Investment in the US: A Review of Evidence from the 2018 Restoring Internet Freedom Order","authors":"George S. Ford","doi":"10.1515/RNE-2018-0043","DOIUrl":"https://doi.org/10.1515/RNE-2018-0043","url":null,"abstract":"Abstract In 2018, the Federal Communications Commission’s Restoring Internet Freedom Order reversed its 2015 decision to apply common carrier regulation to broadband Internet access services under Title II of the Communications Act of 1934. Empirical evidence indicating negative investment effects of the regulation played a key role in this reversal, though the quantification of these investment effects were a matter of substantial controversy. This article surveys the studies cited in the recent decision and the Commission’s scrutiny of them. In all, the Commission considered eight primary works but relied on only two of them, a culling process that relied on four principles: (1) simply comparing outcomes before-and-after an event is not a valid impact analysis; (2) before-and-after comparisons are more probative if regression analysis is used to condition the outcomes by accounting for potentially relevant factors like economic growth, sales, and so forth; (3) the causal effects of a regulation are best determined with reference to a counterfactual; and (4) the application of proper methods does not excuse the use of bad data. These principles are mostly uncontroversial and are consistent with the modern practice of impact analysis.","PeriodicalId":45659,"journal":{"name":"Review of Network Economics","volume":"40 1","pages":"175 - 205"},"PeriodicalIF":0.7,"publicationDate":"2018-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"87801874","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract The US debate about net neutrality has been unusually contentious for a telecommunications regulatory issue, most recently culminating in a 2017 reversal of a 2015 decision to apply traditional telephone regulations, written for a monopoly era, to internet service providers. This article reviews this history, beginning 1956 when the government first imposed an industry boundary between transmission of information on the one hand, and the creation and processing of information on the other. This regulatory legacy remains embedded in US law and has led to some of the muddle. This article also examines the academic literature relating to net neutrality. On this, the answers found in the literature vary depending on assumptions made about technology, industry structure, and industry practices. When the answer to the question of whether regulations are beneficial is “it depends,” and the scenarios that give different answers are realistic, it would seem that the policy approach should favor applying competition and consumer protection laws that address problems when they occur rather than ex ante regulations, which would be certain to harm at least in some situations.
{"title":"Net Neutrality Policies and Regulation in the United States","authors":"Mark A. Jamison","doi":"10.1515/rne-2018-0041","DOIUrl":"https://doi.org/10.1515/rne-2018-0041","url":null,"abstract":"Abstract The US debate about net neutrality has been unusually contentious for a telecommunications regulatory issue, most recently culminating in a 2017 reversal of a 2015 decision to apply traditional telephone regulations, written for a monopoly era, to internet service providers. This article reviews this history, beginning 1956 when the government first imposed an industry boundary between transmission of information on the one hand, and the creation and processing of information on the other. This regulatory legacy remains embedded in US law and has led to some of the muddle. This article also examines the academic literature relating to net neutrality. On this, the answers found in the literature vary depending on assumptions made about technology, industry structure, and industry practices. When the answer to the question of whether regulations are beneficial is “it depends,” and the scenarios that give different answers are realistic, it would seem that the policy approach should favor applying competition and consumer protection laws that address problems when they occur rather than ex ante regulations, which would be certain to harm at least in some situations.","PeriodicalId":45659,"journal":{"name":"Review of Network Economics","volume":"63 1","pages":"151 - 173"},"PeriodicalIF":0.7,"publicationDate":"2018-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"73202234","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract Net neutrality or “Open Internet” rulemaking has been ongoing for more than a decade. Some 50 nations have adopted formal rules including the US (then repealed), the European Union, India, and many countries in Latin America. Among other arguments, it is asserted that net neutrality rules are necessary for application innovation. While the focus for policymakers has largely been to make rules, there is less attention on how to measure the impact of such rules and how well they achieve their innovation goals. The article summaries a specific research investigation to what degree the introduction of rules in a given country stimulates innovation in that country’s mobile app ecosystem. The focus in on mobile networks because it allowed the most consistent data across countries. The study covered 53 countries, their net neutrality policies (or lack thereof), and the results to the respective mobile application ecosystems of the countries adopting rules between the period of 2010–2016. This investigation tests the proposition that countries which adopt net neutrality rules should experience an increase in mobile app development innovation within their national economy. To test this, a statistical methodology was developed based upon measuring the number of locally developed mobile apps in the country for relevant periods before and after rules are imposed and the corresponding app downloads, usage, and revenue. Measurement was conducted with two independent toolsets and adjusted for the sophistication and penetration of advanced mobile networks in the country. To make more meaningful comparisons and avoid inevitable heterogeneity across the countries, the investigation focuses on two similar countries with different rules, Denmark with soft rules (self-regulation) and Netherlands with hard rules (legislation). The study reviewed the leading theories of innovation as well as the foundational papers in net neutrality to explain the observed discrepancies. The research finds significant statistical support for “soft” net neutrality measures adopted on a voluntary basis. Hard rules adopted through legislation and regulation were not associated with greater mobile app development for the given country. Denmark increased in local mobile app development while Netherlands decreased. Additionally, the explosion of mobile apps from countries with no net neutrality rules and the general dearth of mobile apps from countries which have had hard rules for years runs counter to expected results. This suggests that policymakers revisit their assumptions and expectations for net neutrality policy.
{"title":"Net Neutrality and Mobile App Innovation in Denmark and Netherlands 2010–2016","authors":"Roslyn Layton","doi":"10.1515/RNE-2019-0012","DOIUrl":"https://doi.org/10.1515/RNE-2019-0012","url":null,"abstract":"Abstract Net neutrality or “Open Internet” rulemaking has been ongoing for more than a decade. Some 50 nations have adopted formal rules including the US (then repealed), the European Union, India, and many countries in Latin America. Among other arguments, it is asserted that net neutrality rules are necessary for application innovation. While the focus for policymakers has largely been to make rules, there is less attention on how to measure the impact of such rules and how well they achieve their innovation goals. The article summaries a specific research investigation to what degree the introduction of rules in a given country stimulates innovation in that country’s mobile app ecosystem. The focus in on mobile networks because it allowed the most consistent data across countries. The study covered 53 countries, their net neutrality policies (or lack thereof), and the results to the respective mobile application ecosystems of the countries adopting rules between the period of 2010–2016. This investigation tests the proposition that countries which adopt net neutrality rules should experience an increase in mobile app development innovation within their national economy. To test this, a statistical methodology was developed based upon measuring the number of locally developed mobile apps in the country for relevant periods before and after rules are imposed and the corresponding app downloads, usage, and revenue. Measurement was conducted with two independent toolsets and adjusted for the sophistication and penetration of advanced mobile networks in the country. To make more meaningful comparisons and avoid inevitable heterogeneity across the countries, the investigation focuses on two similar countries with different rules, Denmark with soft rules (self-regulation) and Netherlands with hard rules (legislation). The study reviewed the leading theories of innovation as well as the foundational papers in net neutrality to explain the observed discrepancies. The research finds significant statistical support for “soft” net neutrality measures adopted on a voluntary basis. Hard rules adopted through legislation and regulation were not associated with greater mobile app development for the given country. Denmark increased in local mobile app development while Netherlands decreased. Additionally, the explosion of mobile apps from countries with no net neutrality rules and the general dearth of mobile apps from countries which have had hard rules for years runs counter to expected results. This suggests that policymakers revisit their assumptions and expectations for net neutrality policy.","PeriodicalId":45659,"journal":{"name":"Review of Network Economics","volume":"9 1","pages":"207 - 224"},"PeriodicalIF":0.7,"publicationDate":"2018-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"80360743","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract The economics literature on Net Neutrality (NN) has been largely critical of NN regulation on the basis of theoretical findings that NN violations can be both welfare improving and welfare deteriorating, depending on the circumstances of the case in question. Thus, an ex post competition policy approach would be preferable to a strict ex ante prohibition of NN violations. In contrast, the current paper argues that NN regulation is largely ineffective, in particular, when it comes to the prohibition of fast lanes and other quality of service (QoS) differentiations, and to a lesser extent, when it comes to the zero price rule. NN regulation is only effective in preventing the blocking of specific content and in preventing the favoring of ISP owned content and in preventing some price discriminations. These are also areas where NN regulations are more likely to be welfare-enhancing. Where they are ineffective, NN regulations are likely to create inefficiencies through the cost and allocative inefficiencies caused by NN bypass. The paper ends with a call for theoretical and empirical economic analyses of NN circumvention techniques.
{"title":"Net Neutrality Regulation: Much Ado about Nothing?","authors":"I. Vogelsang","doi":"10.2139/ssrn.3410298","DOIUrl":"https://doi.org/10.2139/ssrn.3410298","url":null,"abstract":"Abstract The economics literature on Net Neutrality (NN) has been largely critical of NN regulation on the basis of theoretical findings that NN violations can be both welfare improving and welfare deteriorating, depending on the circumstances of the case in question. Thus, an ex post competition policy approach would be preferable to a strict ex ante prohibition of NN violations. In contrast, the current paper argues that NN regulation is largely ineffective, in particular, when it comes to the prohibition of fast lanes and other quality of service (QoS) differentiations, and to a lesser extent, when it comes to the zero price rule. NN regulation is only effective in preventing the blocking of specific content and in preventing the favoring of ISP owned content and in preventing some price discriminations. These are also areas where NN regulations are more likely to be welfare-enhancing. Where they are ineffective, NN regulations are likely to create inefficiencies through the cost and allocative inefficiencies caused by NN bypass. The paper ends with a call for theoretical and empirical economic analyses of NN circumvention techniques.","PeriodicalId":45659,"journal":{"name":"Review of Network Economics","volume":"3320 1","pages":"225 - 243"},"PeriodicalIF":0.7,"publicationDate":"2018-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"86612618","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract This paper analyzes the optimal market structures and pricing strategies of a monopolist platform in a two-sided market where the agents on each side prefer the platform to be less competitive on their side; that is, in a market with negative intra-group network externalities. Results show that the equilibrium market structure varies with the extent of negative intra-group network externalities. If the negative network externalities are substantial, that is, if an agent’s disutility due to a larger sized market on his side is high (enough), then the profit-maximizing strategy for the matchmaker will be to match the highest types of one side with all of the agents on the other side. In that case, the matchmaker will charge a high entrance fee from the former side and allow free entrance to the agents of the latter side. However, if the network externalities are not substantial, then the matchmaker will maximize profits by matching an equal number of agents from each side. This paper thus provides an explanation of the asymmetric pricing schedules in two-sided markets when the matchmaker uses a one-program pricing schedule.
{"title":"Negative Intra Group Network Externalities in a Monopolistic Two-Sided Market","authors":"Gokce Kurucu","doi":"10.1515/rne-2017-0054","DOIUrl":"https://doi.org/10.1515/rne-2017-0054","url":null,"abstract":"Abstract This paper analyzes the optimal market structures and pricing strategies of a monopolist platform in a two-sided market where the agents on each side prefer the platform to be less competitive on their side; that is, in a market with negative intra-group network externalities. Results show that the equilibrium market structure varies with the extent of negative intra-group network externalities. If the negative network externalities are substantial, that is, if an agent’s disutility due to a larger sized market on his side is high (enough), then the profit-maximizing strategy for the matchmaker will be to match the highest types of one side with all of the agents on the other side. In that case, the matchmaker will charge a high entrance fee from the former side and allow free entrance to the agents of the latter side. However, if the network externalities are not substantial, then the matchmaker will maximize profits by matching an equal number of agents from each side. This paper thus provides an explanation of the asymmetric pricing schedules in two-sided markets when the matchmaker uses a one-program pricing schedule.","PeriodicalId":45659,"journal":{"name":"Review of Network Economics","volume":"47 1","pages":"51 - 73"},"PeriodicalIF":0.7,"publicationDate":"2018-06-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"78893063","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
京公网安备 11010802042870号
京ICP备2023020795号-1
扫码关注我们
求助内容：
应助结果提醒方式：