The Internet: Still Wide Open and Competitive

[Dave Farber <dave () farber net>]

> Delivered-To: dfarber+ () ux13 sp cs cmu edu
> Date: Fri, 10 Oct 2003 08:25:41 -0400
> From: David Akin <david () davidakin com>
> Subject: The Internet: Still Wide Open and Competitive
> To: dave () farber net
>
>
> 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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