Showing papers by "Ingo Vogelsang published in 2000"

The Internet upheaval : raising questions, seeking answers in communications policy

Abstract: At the beginning of 2000, the U.S. economy was enjoying the longest period of sustained growth and economic prosperity in its history. According to The Internet Upheaval, part of the explanation for this phenomenon is a consequence of how information technologies, in particular the Internet, are upending fundamental economic and social structures.These research studies explore some of the telecommunications policy ramifications of this upheaval. The first section addresses the complexities of adapting the First Amendment to the Internet, the debate over the taxation of e-commerce, and Internet users' attitudes toward online privacy. The second section looks at how the Internet has changed, or will change, traditional models used by economists, sociologists, and others to explain how the world works. The third section discusses the need for new economic models to deal with the rapidly changing competitive landscape. Finally, the fourth section examines economic and policy aspects of universal service.Contributors Mark S. Ackerman, James C. Brent, Barbara A. Cherry, Benjamin M. Compaine, Lorrie Faith Cranor, Irina Dmitrieva, Robert S. Gazzale, Austan Goolsbee, Shane Greenstein, R. Glenn Hubbard, Jed Kelko, Steven G. Lanning, William Lehr, Douglas Lichtman, Jeffrey K. MacKie-Mason, Paul Milgrom, Bridger Mitchell, Geoffrey Myers, W. Russell Neuman, Shawn R. O'Donnell, Joseph Reagle, Michael Riordan, Juan F. Riveros, Gregory L. Rosston, Padmanabhan Srinagesh, Linda O. Valenty, Bradley S. Wimmer.

Competitive Effects of Internet Peering Policies

Abstract: This paper analyzes of two kinds of Internet interconnection arrangements: peering relationships between core Internet Service Providers (ISPs) and transit sales by core ISPs to other ISPs. Core backbone providers jointly produce an intermediate output -full routing capability -in an upstream market. All ISPs use this input to produce Internet-based services for end users in a downstream market. It is argued that a vertical market structure with relatively few core ISPs can be relatively efficient given the technological economies of scale and transaction costs arising from Internet addressing and routing. The analysis of costs identifies instances in which an incumbent core ISP’s refusal to peer with a rival or potential rival might promote economic efficiency. A separate bargaining analysis of peering relationships identifies conditions under which a core ISP might be able to use its larger size and associated network effects to refuse to peer with a rival, thus raising its rival’s costs and ultimately increasing prices to end users. An economic analysis of competitive harm arising from refusals to peer should consider cost-based, efficiency-enhancing justifications as well as attempts to raise rivals’ costs. Paul Milgrom Bridger Mitchell and Padmanabhan Srinagesh Department of Economics Charles River Associates Stanford University 285 Hamilton Avenue Stanford, CA 94305-6072 Palo Alto, CA 94301

The Irony of Telecommunications Deregulation: Assessing the Role Reversal in U.S. and EU Policy

Abstract: This chapter contains sections titled: Introduction, Policy Responses of U.S. and EU to Rate Rebalancing, The Importance of Institutional Analyses, Kingdon’s Model of Policy Formation, Applying Kingdon’s Model to the U.S. and EU Policies, Creating Windows of Opportunity in the U.S., Conclusion, Notes, References

Telecommunications, the Internet, and the Cost of Capital

Abstract: This chapter contains sections titled: Introduction, Real Options and the Valuation of Firms, Two-Period Framework of ADEP (1996), More General Dynamic Framework, Real Options and the Cost of Capital for Telecommunications and Internet Firms, Conclusions and Extensions, Notes, References

Media Mergers, Divestitures, and the Internet: Is It Time for a New Model for Interpreting Competition?

Abstract: This chapter contains sections titled: Introduction, What Is Going on Here?, Size and Scope of the Media Business, Blurring Boundaries of Media Industries, Determining Media Concentration, The Economic Nature of Information, Competition in the Media Arena, Criteria for Ascertaining Antitrust, New Technologies and Consumer Behavior and Media Markets, Measuring Media Competition, Trends in Media Concentration, 1986 to 1997, Findings, Policy Implications of the Trends in Media Ownership, Implications for Public Policy, Conclusion: More Concentration or Greater Competition?, Notes, References

Winners and Losers from the Universal Service Subsidy Battle

Abstract: This chapter contains sections titled: Introduction, Theory of “Universal Service”, What Does It Cost to Provide Phone Service?, The New Federal Program, Who Gets the Subsidy?, Demographic Information, Conclusions, Notes, References

Regulation of Access to the Telecommunications Network of New Zealand: A Review of the Literature

Abstract: The rapid widespread technological change and concomitant deregulation of network industries has engendered a burgeoning demand for connection between technologically like as well as technologically unlike networks. The processes by which contracts are reached and the nature of these contracts is important for the performance of these industries.This is a review of the state of the economic literature about interconnection. While its focus is on telecommunications the principles it reviews are more or less relevant to other networks depending upon their particular characteristics. The review considers only the pricing element of an interconnection contract leaving other issues such as risk sharing transactions costs and technological agreement aside. It does not consider the direct or political economy costs of regulation. Even so it reveals that the pricing issues have not been solved.It is apparent from the review that interconnection pricing can only be appraised in the wider context of the regulation and competition of the market as a whole. For example the properties of the now-famous Baumol-Willig (ECPR) rule are different when there is a retail price cap than without it. It is critical for the special treatment of interconnection contracts that there are natural monopoly elements in the network. Where these are absent or bypass is economically viable interconnection contracts will generally not pose special competition concerns.The survey reviews the conceptual basis of proposed regulatory schema andmeasurement issues that arise in their use. In particular it considers various price-cap mechanisms. It does not systematically review the literature on industry and regulatory performance under the different regulatory regimes.Where there are natural monopoly elements the review suggests that for one-way access the two leading approaches to regulation appear to be price caps or access price caps combined with deregulated retail tariffs. These approaches would include a form of the Baumol-Willig rule. The review emphasises that two-way access is characterised by both potential exclusion and potential collusion. It suggests that a regulatory approach would seek to concentrate on keeping access charges low. Lighthanded regulation would then come in the form of deregulated retail tariffs. Taken together this suggests that in a system with both one-way and two-way access theremight be access price caps possibly with two baskets one for one-way access and one for two-way access charges. At the same time retail would be deregulated. In New Zealand the regulatory price cap has been on household access.The literature surveyed on private negotiations is quite thin. It suggests that where regulators can step in as backups if private negotiations fail it would allow regulators to concentrate on contentious issues while the "technical" issues would be resolved privately. In such circumstances regulatory determination can become the common mechanism by default.

Will Tomorrow Be Free? Application of State Action Doctrine to Private Internet Providers

Abstract: This chapter contains sections titled: Introduction, Data and Specification, Results, Conclusion, Acknowledgments, Notes, References

An Economist’s Perspective on Universal Residential Telephone Service

Abstract: This chapter contains sections titled: Introduction, Some Background, A Model of Residential Telephone Service, The Vanishing Universal Service Problem, Give Consumers More Choice, Competition and Universal Service, High-Cost Areas, The Targeting Principle, Conclusion, Mathematical Appendix, Notes, References

A Taxonomy of Communications Demand

Abstract: This chapter contains sections titled: Demand Forecasting under Conditions Of Exponential Growth, Forecasting Aggregate Demand Response for Bandwidth, Photons Don’t Wait, Legacy Services, Transitional Period: Multiple-Attribute Bits, Longer Term: Bandwidth, Maybe Latency and Reliability, Implications, Conclusions, Notes, References