The growing demand for bandwidth for data-intense applications, such as online videos and cloud gaming, and the increasing commercial relevance of the Internet have stimulated a global debate on the viability of the Internet's economic model and the role of net neutrality regulation.
The consultation process of the European Commission in the second half of 2010 resulting in over 300 responses shows the vivid interest of policy makers and regulators, industry, and the general public on this matter in Europe. “However, a thorough analysis of the implications of net neutrality regulation on some possible Internet business models adapted to the different market conditions in Europe, foremost European access regulation, is missing,” states Hans W. Friederiszick, coauthor of the study “Assessment of a sustainable Internet model for the near future.”In the independent academic study by Hans W. Friederiszick, Jakub Kaluzny, Simone Kohnz, and Lars-Hendrik Röller and commissioned by Deutsche Telekom, ESMT Competition Analysis (CA) presents four Internet business models and deliberates on the potential regulatory implications of each. Each business model focuses on a different aspect, like congestion management, new services or consumer choice, thus covering a broad universe of potential future scenarios. Each model affects congestion, innovation, as well as consumer and
social welfare which a regulatory approach should take into account. Since it is difficult to predict with any certainty which business models will dominate in the future, the prudent approach requires authorities to apply an informed “wait and see” approach: closely monitoring market developments and forcefully reacting to any emerging competitive threats rather than acting pre-emptively and therewith preventing some beneficial business models from developing.
Lars-Hendrik Röller, ESMT president and senior advisor at CA, said, “European regulators should carefully consider the economic consequences of regulation of the Internet. This report provides them with comprehensive insights on how different business models are affected by different regulatory frameworks.”
The four profitable Internet business models identified by the authors:
The “Congestion Based Model” tackles congestion problems through congestion-based pricing; however no quality differentiation is introduced. Specifically, in this business model ISPs are assumed to charge content providers higher prices for traffic in peak periods than in off-peak periods. For example, the cost for a provider of movie downloads could be significantly higher when an end user downloads a HD movie during the peak evening period than in the early morning hours or within a 24-hour period. End users in this business model can choose between flat rates with differentiated data caps.
The “Best Effort Plus Model” preserves the traditional best effort network for existing services and assumes that content providers and end users are priced as in the status quo if they operate on the best effort level. However, these restrictions do not apply to innovative future services, for which pricing and minimum service requirements follow individual negotiations between the eyeball ISP and the content provider.
The “Quality Classes – Content Pays Model” stresses the perceived need of different applications for various degrees of quality of service and offers different quality classes open for different applications. Unlike in the previous business model, the quality classes encompass all services, including currently available traditional services. Depending on their requirements, a content provider could purchase a transit quality most appropriate for its type of content. For example, a content provider offering HD movie streaming or gaming services requiring low latency would purchase a more expensive premium quality class to ensure the quality of experience for end users. End users would still pay a uniform flat rate in this model and experience the quality as chosen by the content provider.
The “Quality Classes – User Pays Model” focuses on consumer choice for higher quality levels and offers multiple quality classes for end users that are designed to match their different usage patterns. For example, end users who frequently use interactive applications might choose the quality class which is more suitable for dealing with such applications, i.e., that offers a low level of delay and jitter.
To download the study: http://www.esmt.org/info/latestPress contact
How Strong Brands Translate into Money
15.11.2016 | Kühne Logistics University - Wissenschaftliche Hochschule für Logistik und Unternehmensführung
Demographic change depresses tax revenues
04.11.2016 | Fraunhofer-Institut für Angewandte Informationstechnik FIT
Physicists of the University of Würzburg have made an astonishing discovery in a specific type of topological insulators. The effect is due to the structure of the materials used. The researchers have now published their work in the journal Science.
Topological insulators are currently the hot topic in physics according to the newspaper Neue Zürcher Zeitung. Only a few weeks ago, their importance was...
In recent years, lasers with ultrashort pulses (USP) down to the femtosecond range have become established on an industrial scale. They could advance some applications with the much-lauded “cold ablation” – if that meant they would then achieve more throughput. A new generation of process engineering that will address this issue in particular will be discussed at the “4th UKP Workshop – Ultrafast Laser Technology” in April 2017.
Even back in the 1990s, scientists were comparing materials processing with nanosecond, picosecond and femtosesecond pulses. The result was surprising:...
Have you ever wondered how you see the world? Vision is about photons of light, which are packets of energy, interacting with the atoms or molecules in what...
A multi-institutional research collaboration has created a novel approach for fabricating three-dimensional micro-optics through the shape-defined formation of porous silicon (PSi), with broad impacts in integrated optoelectronics, imaging, and photovoltaics.
Working with colleagues at Stanford and The Dow Chemical Company, researchers at the University of Illinois at Urbana-Champaign fabricated 3-D birefringent...
In experiments with magnetic atoms conducted at extremely low temperatures, scientists have demonstrated a unique phase of matter: The atoms form a new type of quantum liquid or quantum droplet state. These so called quantum droplets may preserve their form in absence of external confinement because of quantum effects. The joint team of experimental physicists from Innsbruck and theoretical physicists from Hannover report on their findings in the journal Physical Review X.
“Our Quantum droplets are in the gas phase but they still drop like a rock,” explains experimental physicist Francesca Ferlaino when talking about the...
16.11.2016 | Event News
01.11.2016 | Event News
14.10.2016 | Event News
09.12.2016 | Life Sciences
09.12.2016 | Ecology, The Environment and Conservation
09.12.2016 | Health and Medicine