Delivered-To: dfarber+@xxxxxxxxxxxxxxxxxx
Date: Fri, 10 Oct 2003 08:25:41 -0400
From: David Akin <david@xxxxxxxxxxxxx>
Subject: The Internet: Still Wide Open and Competitive
To: dave@xxxxxxxxxx
Haven't finished reading this paper yet (too much calculus!), but thought
IPers might find it interesting:
[Paper at: http://intel.si.umich.edu/tprc/papers/2003/200/noam_TPRC2003.pdf]
Eli Noam, director of the Columbia Institute for Tele-Information, recently
published: "The Internet: Still Wide Open and Competitive?"
The report's conclusion:
"We have found pronounced horizontal and vertical trends of concentration in
the Internet sector. What are the implications? It would take a lengthy
essay to fully analyze this question. But some implications can be
anticipated:
-- Higher user prices, and a higher profitability of the major firms.
-- A slowing of innovation and upgrade.
-- Increased power of major Internet firms over:
(a) its governance, standards, and protocols
(b) access by content and applications providers
(c) hardware providers
-- Cross-subsidies within major Internet firms to segments that are more
competitive, distorting competition.
-- The emergence of regulation to deal with such power.
If the Internet becomes dominated by a few firms, and given its centrality
to commerce, culture, and politics, it is not likely to be left alone by
regulation. Earlier debates over the opening of cable-provided Internet
access are an early example. Others are likely to follow. Hence, the
Internet might, in the long term, move from an entrepreneurial and
libertarian model to one of market power and of regulation resembling or
even exceeding that of other electronic media.
These findings and conclusions may not fit the Internet¹s self-image of
being wide-open and competitive, but business strategies and public policies
will benefit from a realistic rather than wishful assessment."
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