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Net Neutrality


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Research Papers

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.

Research Papers

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?

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