The Internet Corporation for Assigned Names and Numbers (ICANN) has control over extremely important aspects of the Internet, but is largely accountable to no one, according to a new study coauthored by Thomas M. Lenard and Lawrence J. White. ICANN�s governance structure should be dramatically reformed to make it more accountable before the current tie with the U.S. Department of Commerce is allowed to expire. Lenard is President and Senior Fellow at TPI; White is Professor of Economics at the NYU Stern School of Business.
Research Papers
The Budgetary Effects of High-Skilled Immigration Reform
Most economists believe that admitting more highly skilled workers from other countries is beneficial to the U.S. economy. This is particularly true of workers in the fields of science, technology, engineering, and mathematics (STEM). Immigration also has positive effects on the federal budget. Highly skilled workers pay more in taxes than less skilled workers and they are not likely to receive federal benefits, particularly in the near term.
Measuring the Digital Divide
Accurate measurement of digital divides is important for policy purposes, but existing methodologies and data have limited our ability to examine the issue. James Prieger and Wei-Min Hu compare the performance of alternative methods using a large dataset on DSL subscription, paying particular attention to whether women, blacks, and Hispanics catch up to others in broadband adoption. Duration analysis, which sheds light on how groups progress along adoption curves, reveals the most useful information about digital divides and how they change over time. Policymakers can use the information to identify groups for which a divide is widening rather than closing. Their results support the collection of broadband statistics in panel form, where the same households are followed over time.
The Broadband Bonus: Accounting for Broadband Internet
Professor Shane Greenstein, Elinor and Wendell Hobbs Professor at the Kellogg School of Management, Northwestern University, estimates that broadband adds about $10 billion per year in new GDP and another $5 billion in unmeasured consumer surplus. These are large effects, but smaller than some previous estimates. The reason for the difference is that most studies attribute all gains from the Internet to broadband, rather than just the gains that came from upgrading to broadband from dialup. Professor Greenstein’s research, based on the economics of new goods, will help give policymakers a more accurate estimate of the benefits of broadband subsidies. Professor Greenstein will discuss his findings at our event this Friday on Capitol Hill.
New research on broadband and economic growth
Kellogg School of Management Professor Shane Greenstein estimates that broadband adds about $10 billion per year in new GDP and another $5 billion in unmeasured consumer surplus. These are large effects, but smaller than some previous estimates. The reason for the difference is that most studies attribute all gains from the Internet to broadband, rather than just the gains that came from upgrading to broadband from dialup. Professor Greenstein’s research, based on the economics of new goods, will help give policymakers a more accurate estimate of the benefits of broadband subsidies.
I own the pipes, you call the tune: The net neutrality debate and its (ir)relevance for Europe
The debate of the so-called ?net neutrality? has been under the spotlight in the US for many years, whereas many believed it would not become an issue in Europe. However, over the past few months the need to revise the current regulatory framework to encourage investment in all-IP networks has led to greater attention for net neutrality and its consequences for investment and competition. After the Commission adopted a ?light-touch? approach to the issue at the end of 2007, the European Parliament has started to reconsider the issue, and it is reportedly considering a move towards more pro-neutrality rules. This paper summarises the main issues at hand in the net neutrality debate and the views expressed by advocates and opponents of the neutrality principle. The problem is described from a multi-sided market perspective, stressing the role of network operators as intermediaries in the ?layered? architecture of all-IP networks. Finally, the paper discusses whether the European regulatory framework and its interaction with ex post competition policy are likely to solve many of the concerns of net neutrality advocates without any need for ad hoc regulation; and whether currently proposed solutions are likely to prove welfare-enhancing and conducive to a better regulatory environment for future e-communications.
‘Night of the Living Dead’ or ‘Back to the Future’? Electric Utility Decoupling, Reviving Rate-of-Return Regulation, and Energy Efficiency
The distribution grid for delivering electricity to the user has been paid for as part of the charge per kilowatt-hour that covers the cost of the energy itself. Conservation advocates have promoted the adoption of policies that “decouple” electric distribution company revenues or profits from how much electricity goes through the lines. Their motivation is that usage-based pricing leads utilities to encourage use and discourages conservation. Because decoupling divorces profits from conduct, it runs against the dominant finding in regulatory economics in the last twenty years – that incentive-based regulation outperforms rate-of-return. Even if distribution costs are independent of use, some usage charges can be efficient. Price-cap regulation may distort utility incentives to inform consumers about energy efficiency – getting more performance from less electricity. Utilities will subsidize efficiency investments, but only when prices are too low. Justifying policies to subsidize energy efficiency requires either prices that are too low or consumers who are ignorant.
The End or the Means? The Pursuit of Competition in Regulated Telecommunications Markets
Economic analysis takes as its defining performance benchmark the pursuit of increases in welfare (efficiency). Competition is merely one of a variety of means of achieving the efficiency end, especially in industries where the underlying economic circumstances predispose them towards greatest efficiency when competition (in the form of many market participants) is restricted. Typically, regulatory intervention in these industries is justified by the imperative to increase efficiency. Competition law and industry-specific regulation provide two competing means of intervention whereby the pursuit of efficiency can be enhanced. The challenge is in determining how to allocate responsibility for governance of industry interaction between these two institutional forms. Whilst competition law can govern interaction in most industries, where the underlying economic conditions are sufficiently different, industry-specific regulation offers advantages. However, its weakness is the risk of capture, leading to the subjugation of the efficiency end to the pursuit of other objectives (e.g. competition – the means – as an end in itself). But if the regulatory institution could be bound in some way to pursue an efficiency objective, could the risk of capture be averted?
A Comparison of the Technology Policies of Barack Obama and John McCain
This comparison is drawn from and adheres closely to statements on the presidential candidates? websites.1 Both websites list technology among the issues most important to their campaigns. The comparison summarizes the candidates? views on key issues and highlights important similarities and differences.