Wednesday, June 1, 2011
Posted by D. Daniel Sokol
Christopher S. Yoo, University of Pennsylvania Law School, University of Pennsylvania - Annenberg School for Communication asks Is the Internet a Maturing Market? If So, What Does that Imply?
ABSTRACT: Network providers are experimenting with a variety of new business arrangements. Some are offering specialized services the guarantee higher levels of quality of service those willing to pay for it. Others are entering into strategic partnerships that allocate more bandwidth to certain sources. Interestingly, a management literature exists suggesting that both developments may simply reflect the ways that the nature of competition and innovation can be expected as markets mature. The real question is not if the nature of competition and innovation will change, but rather when and how. This theory also suggests that policymakers should be careful not to lock the Internet into any particular architecture or to reflexively regard deviations from the status quo as inherently anti-competitive. Instead, they should focus on creating regulatory structures that preserve industry participants’ freedom to tussle with new solutions and to adapt to changing market conditions. Any other approach risks precluding the industry from following its natural evolutionary path.