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The fallacies of network neutrality regulation

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  • Knieps, Günter
  • Zenhäusern, Patrick

Abstract

In this paper, historical functionalities of the traditional Internet are contrasted with today's Internet functionalities of the 'smart' Internet architecture. It is shown that network neutrality regulation prohibiting congestion management and traffic quality differentiation is contrary to economically founded allocation mechanisms. By access regulation of local loop bottleneck components the transfer of market power from the telecommunications infrastructure into the complementary Internet access service markets can be avoided. Regulation between access service providers and Internet application service providers is not only superfluous but detrimental.

Suggested Citation

  • Knieps, Günter & Zenhäusern, Patrick, 2008. "The fallacies of network neutrality regulation," Discussion Papers 115 [rev.], University of Freiburg, Institute for Transport Economics and Regional Policy.
    • Handle: RePEc:zbw:aluivr:115r
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    References listed on IDEAS

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    1. Knieps, Günter, 2006. "The different role of mandatory access in German regulation of railroads and telecommunications," Discussion Papers 104 [rev.], University of Freiburg, Institute for Transport Economics and Regional Policy.
    2. Blankart, Charles B. & Knieps, Günter & Zenhäusern, Patrick, 2007. "Regulation of new markets in telecommunications? Market dynamics and shrinking monopolistic bottlenecks," Discussion Papers 112 [rev.], University of Freiburg, Institute for Transport Economics and Regional Policy.
    3. G. Knieps, 2005. "Telecommunications Markets in the Stranglehold of EU Regulation: On the need for a disaggregated regulatory contract," Competition and Regulation in Network Industries, Intersentia, vol. 6(2), pages 75-94, June.
    4. Knieps, Günter, 2006. "Die LKW-Maut und die drei Grundprobleme der Verkehrsinfrastrukturpolitik," Discussion Papers 111, University of Freiburg, Institute for Transport Economics and Regional Policy.
    5. Birke, Franziska, 2007. "Universaldienstregulierung in der Telekommunikation heute: Herausforderungen, Chancen und Risiken ; ein historischer Ansatz," Discussion Papers 114, University of Freiburg, Institute for Transport Economics and Regional Policy.
    6. Aberle, Gerd, 2005. "Zukünftige Entwicklung des Güterverkehrs: Sind Sättigungsgrenzen erkennbar?," Discussion Papers 106, University of Freiburg, Institute for Transport Economics and Regional Policy.
    7. Knieps, Günter, 2007. "Wettbewerbspotenziale im Nahverkehr: Perspektiven und institutionelle Barrieren," Discussion Papers 113, University of Freiburg, Institute for Transport Economics and Regional Policy.
    8. Knieps, Günter, 2005. "Telecommunications markets in the stranglehold of EU regulation: on the need for a disaggregated regulatory contract," Discussion Papers 109 [rev.], University of Freiburg, Institute for Transport Economics and Regional Policy.
    9. Günter Knieps, 2006. "The Different Role Of Mandatory Access In German Regulation Of Railroads And Telecommunications," Journal of Competition Law and Economics, Oxford University Press, vol. 2(1), pages 149-158.
    10. Knieps, Günter, 2005. "Versorgungssicherheit und Universaldienste in Netzen: Wettbewerb mit Nebenbedingungen?," Discussion Papers 107, University of Freiburg, Institute for Transport Economics and Regional Policy.
    11. Corsetti, Giancarlo & Devereux, Michael P. & Guiso, Luigi & Hassler, John & Saint-Paul, Gilles & Sinn, Hans-Werner & Sturm, Jan-Egbert & Vives, Xavier, 2010. "The European economy," Munich Reprints in Economics 20104, University of Munich, Department of Economics.
    12. Günter Knieps, 2006. "Competition in the Post-Trade Markets: A Network Economic Analysis of the Securities Business," Journal of Industry, Competition and Trade, Springer, vol. 6(1), pages 45-60, March.
    13. Weiß, Hans-Jörg, 2005. "Die Potenziale des Deprival Value-Konzepts zur entscheidungsorientierten Bewertung von Kapital in liberalisierten Netzindustrien," Discussion Papers 108, University of Freiburg, Institute for Transport Economics and Regional Policy.
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    Cited by:

    1. Stocker, Volker, 2013. "On the weal and woe of internet traffic management in Europe: A critical appraisal from a network economic perspective," 24th European Regional ITS Conference, Florence 2013 88542, International Telecommunications Society (ITS).

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