Subsidization Competition: Vitalizing the Neutral Internet

Unlike telephone operators, which pay termination fees to reach the users of another network, Internet Content Providers (CPs) do not pay the Internet Service Providers (ISPs) of users they reach. While the consequent cross subsidization to CPs has nurtured content innovations at the edge of the Internet, it reduces the investment incentives for the access ISPs to expand capacity. As potential charges for terminating CPs' traffic are criticized under the net neutrality debate, we propose to allow CPs to voluntarily subsidize the usagebased fees induced by their content traffic for end-users. We model the regulated subsidization competition among CPs under a neutral network and show how deregulation of subsidization could increase an access ISP's utilization and revenue, strengthening its investment incentives. Although the competition might harm certain CPs, we find that the main cause comes from high access prices rather than the existence of subsidization. Our results suggest that subsidization competition will increase the competitiveness and welfare of the Internet content market; however, regulators might need to regulate access prices if the access ISP market is not competitive enough. We envision that subsidization competition could become a viable model for the future Internet

Innovations in Mobile Broadband Pricing

The FCC’s net neutrality rules sought to limit interference by broadband service providers in markets for Internet-based content and applications. But to do so, the Commission significantly reduced the amount of innovation possible in the broadband service market. Within limits, broadband providers may offer different plans that vary the quantity of service available to customers, as well as the quality of that service. But they generally cannot vary the service itself: with limited exceptions, broadband providers must offer customers access to all lawful Internet traffic, or none at all. This Article explores the way in which this all-or-nothing homogenization of the American broadband product differs from innovative experiments taking place in other countries. In various parts of the world, customers are offered several alternatives to the unlimited Internet model, including social media plans, feature phone partnerships, bundled apps, and free premium content. It also examines the positive role that vertical agreements may play when promoting innovation and competition within a market. Undoubtedly, the FCC can and should intervene to stop anticompetitive practices, including anticompetitive vertical foreclosure. But these determinations should be made on a case-by-case basis based on proof of market power and consumer harm. This approach would allow wireless providers to experiment with new and different Internet business models without risking an unnecessary regulatory response

Neutrality in the Modern World: Internet Regulation\u27s Impact on Economics and Society

In the United States, net neutrality laws prevented service providers from restricting open access to the Internet. In 2017, these laws were repealed and consumers became concerned that Internet providers would take advantage of them through blocking, throttling, and paid prioritization. The trend in the United States, from the rise of the telephone and wire transfer to the rise of the Internet, was toward facilitating access to the Internet for all citizens. This is intended to result in economic advantages for the country, and aid in the development of broadband Internet. Open access to the Internet was regarded as providing investment, innovation, and development until the repeal of net neutrality laws. This Note analyzes how the EU, France, and the U.S. have developed distinctive net neutrality regulations. Further, this Note examines the social and economic reasons for why the regulations were developed and the relative strengths and weaknesses each regulatory scheme provides. This Note argues that the U.S. should conform its system to model the EU and France’s system in some respects to maximize for the social and economic advantages those systems provide, while avoiding each system’s relative disadvantages

Pricing Sponsored Data Plans in Two-Sided Markets

This thesis shows that a monopoly Internet Service Provider will never offer zero-rated mobile data plans for homogenous consumers if it cannot ask content providers to pay for the traffic increase caused by to zero-rating. Increasing the data allowance will result in similar utility gains for the customers than zero-rating some content, with lower or identical costs for the Internet Service Provider. When a monopoly Internet Service Provider is allowed to collect payments from content providers, prices to both sides of the market are determined by the size of the data allowance. Opposing effects of distorted consumption towards the zero-rated content and increased total consumption of data mean that total welfare effects remain ambiguous and depend on the parameter values

Rational Regulatory Policy for the Digital Economy: Theory and EU Policy Options

Telecommunications is a key element of the ICT sector which has been shaped by strong innovation dynamics since the 1990s. Market dynamics in selected OECD telecommunications markets are analyzed. We present new ideas about efficient regulation, emphasizing the need to adopt a broader international perspective. Analytical innovations also include the discussion of an adequately-modified Hitch-Sweezy oligopoly model. Moreover, we suggest differentiated two-part tariffs as an ideal welfare-maximizing approach in both wholesale and end-product markets. From a theoretical point-of-view, the need to avoid regulatory uncertainty is also emphasized. Theoretical progress is contrasted with regulations in the EU and the US. The EU offers a broad range of different regulatory approaches where the link between framework regulation and national regulation is rather complex. The internationalization of telecommunications requires a broader cooperation among regulators in the OECD.Digital Economy, Regulatory Policy, European Union

The 700 MHz Spectrum Auction: An Opportunity to Protect Competition In a Consolidating Industry

Auctions, spectrum auctions, market design

Debatable Premises in Telecom Policy, 31 J. Marshall J. Info. Tech. & Privacy L. 453 (2015)

The five premises that this paper considers are: 1. Everyone needs low-cost access to high speed broadband service 2. High-speed broadband is necessary for education, health, government, and other social services 3. Wireless can‟t compete with cable 4. An open Internet is necessary for innovation and necessarily benefits consumers 5. Telecommunications are better somewhere else