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Economic policy analysis and the Internet:

Source: www-econ.stanford.edu
Topic: Economic Policy

Sort Desciption: The significant set of public policy issues for economic analysis that arise ...... much contemporary discussion of economic policy which tends to offer ...

Content Inside: Economic policy analysis and the Internet: Coming to terms with a telecommunications anomaly B y Paul A. David Stanford University & Oxford Internet Institute Previous draft: 18 May 2006 This version: 25 October 2006 Forthcoming in the Oxford Handbook on Information and Communication Technologies edited by C. Ciborra R. E. Mansell D. Quah and R. Silverstone Oxford: Oxford University Press Fall 2006. ABSTRACT The significant set of public policy issues for economic analysis that arise from the tensions between the special benefits of the Internet as a platform for innovation and the drawbacks of the anomalous features of the Internet viewed as simply one among the array of telecommunications systems is the focus of discussion in this chapter. Economists concerned with industrial organization and regulation (including antitrust and merger law) initially found new scope for application of their expertise in conventional policy analyses of the Internets interactions with other segments of the telecommunications sector (broadcast and cable television radio and telephone) and emphasized the potential congestion problems posed by user anonymity and flat rate pricing. Policy issues of a more dynamic kind have subsequently come to the fore. These involve classic tradeoffs between greater efficiency and producer and consumer surpluses today and a potential for more innovation in Web-based products and service in the future. Many such tradeoffs involve choices such as that between policies that would preserve the original end-to-end design of the original Internet architecture and those that would be more encouraging of market-driven deployment of new technologies that afforded ISPs with greater market power the opportunity to offer (and extract greater profits from) restricted-Web services that consumers valued highly such as secure and private VOIP. Contact Author: P. A. David Department of Economics Stanford University CA 94304-6072 pad@stanford.edu ; p ...

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