New Academic Research Challenges Broadband Internet Rules

Forbes Innovation Enterprise Tech New Academic Research Challenges Broadband Internet Rules Roslyn Layton Senior Contributor Opinions expressed by Forbes Contributors are their own. International Tech Policy Following Feb 16, 2023, 11:51am EST | Press play to listen to this article! Got it! Share to Facebook Share to Twitter Share to Linkedin Given that net neutrality rules have been on the books for many years, it an important opportunity . .

. [+] to measure whether the purported goals to protect consumers and promote innovation. getty A series of new academic papers in game theory, economics, and antitrust examine the empirical impact of “net neutrality” or “open internet” rules.

This comes as many nations review the efficacy of policies purported to protect consumers and innovation, but unwittingly seem to strengthen established technology platforms as the expense of startups. The emergence of such research is likely helpful to the United Kingdom but will be ignored, if not dismissed, in the European Union. The US, South Korea, Japan, Australia and New Zealand offer important examples of countries which flourish without heavy hand net neutrality rules.

Many policymakers claim that they want to use the best academic evidence to inform legislation and rules; it’s another matter to do it. Having the right data but failing to use it for political reasons is a central thesis of Pferrer and Sutton’s The Knowing-Doing Gap: How Smart Companies Turn Knowledge into Action (2000), a classic in industrial organizations. Game Theory In The paradox of (Inter) net neutrality: An experiment on ex-ante antitrust regulation , researchers at the University of Valencia in Spain Irene Comeig, Klaudijo Klaser, and Lucía Pinar conducted an economic experiment based on an extended version of the dictator game controlling for the effect of an ex-ante regulation and punishments for collusive behavior.

They conclude, “Big Tech companies, sheltered by the net neutrality policy, have flourished. They now have the power to exclude minor companies, and therefore their contents, from the Internet market in de facto defiance of the net neutrality principle. ” They suggest that policymakers revise net neutrality rules given the asymmetric Internet market structure.

Economics To study the impact of regulation across studies, longitudinal studies, repeated observations of the same variables over long periods of time, are important. Indeed the most significant and comprehensive to date has been conducted by Wolfgang Briglauer, Carlo Cambini, Klaus Gugler,and Volker Stocker in Net neutrality and high-speed broadband networks: evidence from OECD countries . They offer the definitive investigation of the impact of net neutrality rules to investement in fixed line, high speed broadband networks from 2000-2021 years in 32 countries.

Using various panel estimation techniques, including instrumental variables estimation, they find empirical evidence that net neutrality regulations exert a significant negative impact on fiber investments. The conclude that so-called hard net neutrality regulations slow down the deployment of new fiber-based broadband connections. I made a similar conclusion in my doctoral research investing the impact of net neutrality to app innovation on mobile networks in 50 countries.

Essentially countries don’t need hard rules to get innovation. Soft rules like guidelines, self-regulation, and multi-stakeholder models are sufficient to promote innovation (think South Korea and Japan). Moreover countries with no such rules, Australia and New Zealand, are innovative in the gaming space among others.

MORE FOR YOU Why The Rock’s Social Media Muscle Made Him Hollywood’s Highest-Paid Actor LiquidO: The Collaborative, Boss-Less Management Model Why Megadeth Reuniting With Marty Friedman Is A Big Deal In a chapter on net neutrality and Covid-19 in the USA co-authored with Mark Jamison in the forthcoming Beyond the Pandemic?: Exploring the Impact of Covid-19 on Telecommunications and the Internet edited by Jason Whalley, Volker Stocker, and William Lehr, we find no regulatory reports of net neutrality violations in 2020 (broadband providers blocking, throttling or harming end users or content violations) when millions of Americans were locked down in their home, dependent on broadband for work, education, and healthcare. Notably the US, which rejected the price and traffic controls of the 2015 Open Internet Order after 2 years, has since enjoyed significantly increased network investments, growing competition, advanced network technology, increasing broadband speeds, and a narrowing of the digital divide. My report on the United Kingdom documents how the net neutrality regulation blocked children and students from free learning online during the pandemic; costs the economy at least £340 million per year (not an insignificant amount when there is a 25 billion gap to reach investment for full 5G rollout); and appears to have reduced the UK’s rank the production of internet applications as measured by market value relative to 2015.

UK’s telecom regulator Ofcom observes that the rules aren’t working to improve consumer outcomes or broadband investment, and thus modernization is needed. Antitrust Antitrust is an important frontier for internet regulation. The concept of platform neutrality which suggests that the same non-discrimination requirements placed on broadband providers need to be extended to the largest players, as Marsden and Brown argue in ” App stores, antitrust and their links to net neutrality: A review of the European policy and academic debate leading to the EU Digital Markets Act.

” Similarly Winston Maxwell argues for reasonable traffic management on social media platforms. Leading antitrust scholar Oles Andriychuk offers a holistic perspective on managing the ecosystem. In (Why) Did EU Net Neutrality Rules Overshoot the Mark? Internet, Disruptive Innovation and EU Competition Law & Policy he observes that soft rules are capable to deliver positive outcomes without causing hard rule problems, noting EU broadband providers are preventing from disruptive innovations.

Meanwhile some content/application providers can monopolise markets, resulting in dominant positions which are sometimes abused. In the provocative Do Subscribers of Mobile Networks Care About Network Neutrality? , Bauer and Espin suggest that the regulations are irrelevant, as end users don’t change their their behavior when faced with throttled data rates in competitive markets. Follow me on Twitter or LinkedIn .

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