Surplus extraction by network providers: Implications for net neutrality and innovation

This paper looks at surplus extraction by network providers who control the medium of information transfer between application developers and consumers, and addresses the following questions: is net neutrality beneficial to society? and does providing network providers flexibility in pricing stunt innovation in the long run? To answer the first question, it looks at a market consisting of a monopoly network provider and two application providers with non-substitutable products, using a simple single period model. It shows that net neutrality is necessary to ensure maximal benefit to the society. To answer the second question, the paper shows that a monopoly network provider, if allowed complete flexibility in pricing, does not necessarily stunt innovation. Looking at a market that consists of one network provider and one application provider, and using a simple multi-period model, it shows that given maximum flexibility the network provider not only encourages innovation when the potential benefits are sufficiently high but also maximizes surplus. This paper takes the view that the topic of net neutrality is not only controversial but also complicated, and suggests that policy makers use a balanced approach based on sound analysis.     

Mapping the field: Retrospective of the federal universal service programs

The Telecommunications Act of 1996 (1996 Act) established the framework for four federal universal service programs: the High-Cost program, the Low-Income program, the Schools and Libraries (E-rate) program, and the Rural Health Care program. During the past 15 years, these programs have been examined from a number of perspectives in an attempt to measure their efficiency and effectiveness, including the funding mechanisms that support them. The Federal Communications Commission is in the process of restructuring the universal service programs to move support to broadband-based technologies. This is an opportune time to examine what is known about whether these programs have met the universal service objectives of the 1996 Act and have efficiently and effectively used universal service funding. To that end, this article surveys both oversight reports by federal government agencies and academic research literature drawn from a variety of sources to identify areas of concern regarding the mission, implementation, and impact of the federal universal service programs and support mechanisms. The article also includes research findings on how the economic incentives created by the federal universal service programs affect corporate investment and deployment decisions and consumer service and technology adoption decisions.     

Cyprus: A new centre for telecommunications

A rapid expansion of telecommunications facilities on Cyprus in recent years is bringing the island to the fore as a focus for communications in the Middle East region. Its strategic position in the eastern Mediterranean Sea, a communications infrastructure well in advance of that offered by most of the surrounding countries, and fully developed ties with European and Arab countries, are accelerating this already pronounced trend.     

Different paths to universal access: The impact of policy and regulation on broadband diffusion in the developed and developing worlds

The authors examine the broadband digital divide by analyzing the impact of policy and regulation on broadband Internet diffusion. Their multiple regression analysis shows factors that determine broadband diffusion in technologically developed countries do not necessarily have the same impact in less developed countries. They show that in technologically developed countries, there is greater broadband diffusion in countries that make a higher financial investment in information and communication technologies (ICTs), have effective governing practices at the national level, have higher levels of education, and are more urban. In technologically developing nations, a competitive telecommunications sector and higher investment in ICTs lead to greater broadband diffusion, with investment having an even larger impact in the developing world than in the developed world. In addition, stronger democratic political institutions, higher levels of national income and lower levels of income inequality increase diffusion, but the presence of a national telecommunications regulatory authority has a negative impact. These results suggest that the path to widespread availability and use of broadband requires different strategies depending on a nation's level of technological development.     

Public-private partnership for building a resilient broadband infrastructure in Puerto Rico

This article will explore the use of an innovative approach to a public-private partnership (PPP) to spur the deployment of broadband and create more resilient telecommunications networks in Puerto Rico. Such a partnership is a critical ingredient of the plan for rebuilding the telecommunications sector of Puerto Rico after the island was devastated by Hurricanes Irma and Maria in September 2017. The proposed partnership also has the potential for enabling the expansion of citizen access to broadband services throughout Puerto Rico. This work was done as part of the Congressionally mandated economic and disaster recovery plan for the island.     

Net Neutrality in Europe: Desperately seeking a market failure

Net Neutrality has become the focus of attention in the regulatory debate on the Internet. This article attempts to strip down the debate to its bare essential. It identifies two main types of Net Neutrality obligations that have been put forward and assesses what type of potential concerns they may be designed to address. It concludes that while some of these concerns may be important it remains doubtful (at least in Europe) that an ex ante per se rule, such as those proposed under the Net Neutrality term, is the best way to address them.     

Public value mapping of network neutrality: Public values and net neutrality in Korea

Network neutrality (NN) is of broad and current interest despite its complex and multifaceted nature. This study examines NN in the Korean context in terms of policy, industry, values, and society. It addresses the policy effectiveness of ongoing NN discussions by analyzing user attitudes and perceptions. The proposed model empirically tests policy effectiveness through user perceptions by incorporating factors representative of NN. Possible NN factors are derived from the previous literature and perceptions of NN concepts. The results find that regulation and competition are two primary factors constituting network neutrality, and these factors differently influence the formation of attitudes toward policy effectiveness. Political and social implications are discussed based on the proposed model. This study provides comprehensive analysis and heuristic data on user drivers, industry dynamics, and policy implications in the NN ecosystem.     

Multilevel governance and broadband infrastructure development: Evidence from Canada

This paper investigates the contributions of digital infrastructure policies of provincial governments in Canada to the development of broadband networks. Using measurements of broadband network speeds between 2007 and 2011, the paper analyzes potential causes for observed differences in network performance growth across the provinces, including geography, Internet use intensity, platform competition, and provincial broadband policies. The analysis suggests provincial policies that employed public sector procurement power to open access to essential facilities and channeled public investments in Internet backbone infrastructure were associated with the emergence of relatively high quality broadband networks. However, a weak essential facilities regime and regulatory barriers to entry at the national level limit the scope for decentralized policy solutions.     

Rural broadband: The provider matters

As broadband use has grown over the past few years, scholars and policymakers have turned some of their attention to the urban-rural broadband divide. While existing research offers important insights into this divide, no research has fully explored the differences in broadband deployment patterns among various types of telecommunications providers, including both large and small telephone and cable providers. Through data collected from interviews with telecommunications company representatives, this research assesses the extent to which different types of providers are deploying broadband in urban and rural areas. The interviews are also used to ascertain factors shaping the broadband deployment decision-making process for different types of providers. Both the quantitative and qualitative elements of this research demonstrate clear patterns among different types of providers in relation to rural broadband deployment, as different types of companies are influenced by somewhat unique regulations, competitiveness concerns, resource levels, and existing infrastructure conditions.     

Pirates and Samaritans: A decade of measurements on peer production and their implications for net neutrality and copyright

This study traces the evolution of commons-based peer production by a measurement-based analysis of case studies and discusses the impact of peer production on net neutrality and copyright law. The measurements include websites such as suprnova.org, youtube.com, and facebook.com, and the Peer-to-Peer (P2P) systems Kazaa, Bittorrent, and Tribler. The measurements show the two sides of peer production, the pirate side with free availability of Hollywood movies on these P2P systems and the Samaritan side exhibited by the quick joining of 400,000+ people in a community to organize protests against events in Burma. The telecommunications and content industry are disrupted by this way of peer production. As a consequence, revenues of both industries are likely to suffer in the coming years. On the other hand, innovative P2P systems could win the battle on merit over classical distribution technologies. As a result, a continuation is expected of both legal actions against P2P and possible blocking actions of P2P traffic, violating net neutrality. It is argued that this hinders innovation and causes a large discrepancy between legal and user perspectives. A reform of copyright laws is clearly needed, otherwise they will be unenforceable around 2010.     

Telecommunications and economic development – The 21st century: Making the evidence stronger

A review of the literature on the relation between telecommunications and economic development published since the turn of this century is undertaken. Two stages have been considered: until 2008, most contributions continued to examine the role of telecommunications taken together; since 2009, the impact of broadband –and, to a lesser extent, of mobile communications– dominates the research agenda. All in all, the role of telecommunications as a catalyst to leverage economic growth has been conclusively proven over the years. Taking into consideration the shortcomings of previous research, suggestions for future work are also provided.     

The diffusion of new telecommunication technologies

This article assesses the recent diffusion of new telecommunication technologies. Drawing upon an historical framework, the authors find that new technologies face significant barriers to rapid penetration in the home and office. Data on cable television, electronic text services, teleconferencing and alternative video distribution technologies are analysed to highlight the constraints facing the growth of new telecommunications services.