The Fallacies of Network Neutrality Regulation

In this paper, historical functionalities of the traditional Internet are contrasted with today's Internet functionalities of the smart Internet architecture. It is shown that network neutrality regulation prohibiting congestion management and traffic quality differentiation is contrary to economically founded allocation mechanisms. By access regulation of local loop bottleneck components the transfer of market power from the telecommunications infrastructure into the complementary Internet access service markets can be avoided. Regulation between access service providers and Internet application service providers is not only superfluous but detrimental

Mobile Termination: What is the “Right” Charge?*

The regulation of fixed-to-mobile (F2M) termination charges has become increasingly important in Europe, Australia, and New Zealand under the Calling Party Pays principle. In the absence of any regulation, mobile operators have an incentive to set F2M termination charges “too high”. We show that the setting of the optimal F2M termination charges depends on the significance of network externalities, the intensity of competition in the mobile sector, and the distribution of customer preferences. We also discuss the merits of possible remedies which are not very intrusive. Copyright Springer Science+Business Media, Inc. 2005mobile telephony, network externality, termination charges, L41, L96,