Network neutrality and the evolution of the internet

In order to create incentives for Internet traffic providers not to discriminate with respect to certain applications on the basis of network capacity require-ments, the concept of market driven network neutrality is introduced. Its basic characteristics are that all applications are bearing the opportunity costs of the required traffic capacities. An economic framework for market driven network neutrality in broadband Internet is provided, consisting of congestion pricing and quality of service differentiation. However, network neutrality regulation with its reference point of the traditional TCP would result in regulatory micro-management of traffic network management. --

The different role of mandatory access in German regulation of railroads and telecommunications

Network services can be provided efficiently in competitive markets, if nondiscriminatory access to the complementary infrastructure capacities is guaranteed. The sector-symmetric application of the disaggregated regulatory approach to railways and telecommunications reveals the different role of mandatory access. Whereas in telecommunications only the local loop may create a remaining regulatory problem, mandatory access has to be guaranteed with respect to the railway infrastructure as a whole. In spite of the large phasing-out potentials of sector-specific regulation in telecommunications, this sector is still under the burden of overregulation. In contrast, in the railway sector mandatory access has been introduced only recently. --

Privatisation of Network Industries in Germany : A Disaggregated Approach

The purpose of this paper is to analyse the impact of market oriented institutional reforms in German network industries. A disaggregated approach is chosen, which differentiates between network services, infrastructure management and network infrastructure. The gradual opening of network service provision has already had a positive impact on the performance of all markets for network services. Nevertheless, harmonisation and integration of infrastructure management as well as an adequate regulation of access to the non-competitive infrastructures (monopolistic bottlenecks) is necessary in order to exploit the full benefits of liberalisation and privatisation of network service markets. --

Network Neutrality and the Evolution of the Internet

In order to create incentives for Internet traffic providers not to discriminate with respect to certain applications on the basis of network capacity requirements, the concept of market driven network neutrality is introduced. Its basic characteristics are that all applications are bearing the opportunity costs of the required traffic capacities. An economic framework for market driven network neutrality in broadband Internet is provided, consisting of congestion pricing and quality of service differentiation. However, network neutrality regulation with its reference point of the traditional TCP would result in regulatory micromanagement of traffic network management. --Broadband Internet,network neutrality,quality of service differentiation,congestion pricing,interclass externality pricing,interconnection agreements

Telecommunications markets in the stranglehold of EU regulation: on the need for a disaggregated regulatory contract

The increasing complexity of EU regulation is resulting in a tangle of contradictory decisions and statements, involving also new markets, such as interactive cable television, Internet etc. Whereas in the past sector-specific regulation has been applied in a discretionary manner in order to correct the rules of the market game, the really challenging task for the future seems to be the development and implementation of statu- tory constraints for the regulatory authorities in order to guarantee a predictable regulation of market power. For this purpose the design and implementation of a disaggre- gated regulatory contract on the statutory level (EU Directives and national law) is derived, which should be an essential principle in the EU Review 2006. Its basic components consist of limiting regulation to monopolistic bottlenecks, exploiting the phasingout potentials, and a disaggregated application of regulatory instruments. In con- trast, the problem of opportunistic regulatory behaviour with respect to irreversible investments can be solved by the application of the already existing statutory constraint of the Framework Directive guaranteeing financial viability. --

The three criteria test, the essential facilities doctrine and the theory of monopolistic bottlenecks

The focus of this paper is on regulatory reforms towards rule-based regulation. The theory of monopolistic bottlenecks is contrasted with the concept of essential facilities and the so-called three-criteria test. It is important to differentiate between efficient private bargaining of access conditions among competitive networks and regulated third party access to monopolistic bottlenecks. Regulation of infrastructure access charges should be limited exclusively to price-capping. In order to avoid the problem of extensive discretionary behavior of regulatory agencies a disaggregated regulatory mandate should be implemented. --

Competition in the post-trade markets: A network economic analysis of the securities business

In order to analyse the role of competition in the post-trade markets a normative network economic analysis of the securities business is provided. The theory of monopolistic bottlenecks constitutes the theoretical reference point for this analysis in order to identify stable network specific market power. It is shown that clearing and settlement are competitive value-added telecommunications services and therefore do not justify ex ante market power regulation. Precondition for competition on the markets for clearing and settlement is nondiscriminatory access to the complementary technical regulatory function - the notary function (authenticity, registry, links between competing end custodians). --

Limits to the (De-)Regulation of Transport Services

In section 1 the disaggregated approach of network economics is explained which distinguishes between the network levels transport services, traffic control systems and fixed infrastructure. Section 2 starts with an explanation of the theory of monopolistic bottlenecks, which can be used as a basis for distinguishing between parts of a network where competition functions efficiently and those that enjoy stable, network-specific market power. Section 3 explores the opportunities for potential and active competition on the markets for transport services, while Section 4 explains the potential for auction competition in respect of air traffic and train control systems. Section 5 is devoted to regulation in connection with access to transport infrastructure, including the relationship between disaggregated regulation of bottlenecks and the essential facilities theory, and the development of an appropriate approach towards regulation of access charges. Lastly, the paper looks at the ongoing reform of access to European airports (Section 6) and rail networks (Section 7). --

Regulatory unbundling in telecommunications

Due to its dynamic nature, and the increasing importance of competitive sub-parts, the telecommunications sector provides particularly interesting insights for studying regulatory unbundling. Based on the theory of monopolistic bottle-necks the fallacies of overregulation by undue unbundling obligations are indicated. Neither the promotion of infrastructure competition by mandatory un-bundling of competitive subparts of telecommunications infrastructure, nor regulatory induced network fragmentation within monopolistic bottleneck com-ponents is justified. The impact of the shrinking of the areas of network specific market power on the remaining unbundling regulation is analyzed. Finally, the phasing-out potentials of unbundling regulation in European telecommunica-tions markets are pointed out. --

The net neutrality debate and the German communications and competition law

A common denominator of network neutrality definitions is a plea against traffic shaping within the Internet and the resultant challenge to the traditional best effort transmission. By means of access regulation of local loop bottleneck components the transfer of market power from the telecommunications network bottleneck components into the complementary Internet access service markets can be avoided. Regulation between access service providers and Internet appli-cation service providers is not justified. The avoidance of network neutrality regulation is of importance, because only then can the adequate market signals (congestion tariffs, quality differentiations etc.) be supplied to the content pro-vider, leading to a more efficient exploitation of the Internet traffic resources. --