UNCW Net Neutrality Policies and Regulation Discussion and Responses Net Neutrality Read four (4) academically reviewed articles on Net Neutrality and com

UNCW Net Neutrality Policies and Regulation Discussion and Responses Net Neutrality

Read four (4) academically reviewed articles on Net Neutrality and complete the following activities:

– Attaching the 4 documents here

(Wikipedia articles will not be accepted. Professor may check originality of all posts. Avoid copy-and-paste.

1. Summarize all four (4) articles in 300 words or more. Please use your own words. No copy-and-paste

2. Base on your article review and the assigned reading, discuss how net neutrality will affect data networks and the availability of information to businesses. Do you believe net neutrality will lead to IT efficiency? Why or why not?

3. Need replies for 2 classmates post, will post it here once i have it There are more Jeff Bezoses (eight hours of sleep per night) than Martha Stewarts (four).
Benjamin Spall and Michael Xander, authors of the upcoming book My Morning Routine,
surveyed more than 100 founders and found 85 percent sleep seven or more hours a night.
THE DEBATE
THE PIVOT
The Pros and the Cons
of Net Neutrality
Ever felt the internet needed major changes? That’s coming, but you’re going to be sorry, say
advocates of net neutrality. They believe internet providers—like Verizon—should treat all web
traffic equally, and are outraged by the Federal Communications Commission’s decision last
December that repealed rules requiring those providers to do just that. Advocates of the FCC
decision insist the market will now dictate what succeeds or fails online. We asked Zachary Sims,
co-founder and CEO of the online coding boot camp Codecademy, and Eliran Sapir, founder and
CEO of data mining firm Apptopia, what all this means for the future of the web. ▶ ZOË HENRY
ZACHARY SIMS
Codecademy
ELIRAN SAPIR
Apptopia
●
Yes. Innovation didn’t
decrease when net neutrality
rules were in place. They
made it possible for upstarts,
like mine and Eliran’s, to
compete.
Should the
internet be
treated like a
utility, such as
electricity?
TO CHANGE
IS HVMN.
TO SUCCEED
IS DIVINE
In 2016, Geoff Woo
and Michael Brandt
went on Shark Tank,
sought a sky-high
valuation for their
supplements startup,
Nootrobox, and were all
but laughed off the set.
So they changed the
name to HVMN (say
human) and refocused
on broadly optimizing performance. The
company’s new flagship product is HVMN
Ketone. It tastes like
nail polish remover and
costs $33 per serving.
●
The Communications Act of
1934 tried to regulate the
phone system. It caused a
lack of competition and
made services more
expensive. More regulation is
terrible for businesses.
●
What will the
internet look
like now that
the FCC has
rolled back
these rules?
●
No changes. Eliminating net
neutrality hasn’t caused any
shift. Whatever has changed
is due to market forces. And
there’s no reason Netflix
should pay the same for net
access as Apptopia, a company a thousandth of its size.
●
●
An ISP could effectively
charge Codecademy a
ransom just to access the
same number of consumers.
It will become much harder
for entrepreneurs to scale,
which seems fundamentally
against the promise
of the internet.
Will this
repeal result in
higher or lower
internet bills?
I believe to my core that it
will result in lower bills for
the smaller guys and more
innovation. The repeal of net
neutrality will force the larger
players to invest in infrastructure for broadband service.
Should government address
the issue?
The FCC introduces policies
that do nothing, and then
repeals them, over and over
again—while real issues,
such as the last-mile delivery
of internet, remain.
●
It is the role of Congress
to protect consumers, and
to deal with some of the other
issues that Eliran brings up.
●
ADVANTAGE SIMS While the FCC has argued that net neutrality rules made it
more difficult for broadband providers to invest in their networks and thus hurt innovation,
evidence suggests that such regulation has had no negative impact on telecom investment—
instead, it increased by 5 percent from 2014 to 2016, when net neutrality rules were in place.
1 8 ● I N C . ● M AY 2 0 1 8 ● ● ● ● ● ●
It’s the first drink on
the market with ketone
esters, which are released when fat breaks
down and account for
the energy surge experienced by people on
fasts. HVMN’s clients
include NFL teams, but
Woo is thinking bigger. “There’s going to
be some shift of caloric content from sugar,” he says. Maybe.
But there’s that gnarly
flavor and an equally
unpleasant aftertaste
(which takes several
minutes to dissipate)—
and one 2.2 ounce
serving costs as much
as a case of Red Bull.
Woo says $33 is, in
some ways, a bargain—
during R&D, producing
a bottle cost more than
$25,000. Bottoms up!
▶JEFF BERCOVICI
SCOTT CHAMBERS (2); COURTESY HVMN
The dystopian vision is that
you’ll be able to watch Netflix, but when someone puts
an indie film online, you’ll
have to pay an extra $100
a month to see it. That’s a
world where someone starting a company can’t get
distribution.
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informs
Information Systems Research
Vol. 22, No. 1, March 2011, pp. 60–82
issn 1047-7047 eissn 1526-5536 11 2201 0060
®
doi 10.1287/isre.1090.0257
© 2011 INFORMS
The Debate on Net Neutrality:
A Policy Perspective
Hsing Kenneth Cheng, Subhajyoti Bandyopadhyay
Department of Information Systems and Operations Management, Warrington College of Business Administration,
University of Florida, Gainesville, Florida 32611 {hkcheng@ufl.edu, shubho@ufl.edu}
Hong Guo
Department of Management, Mendoza College of Business, University of Notre Dame, Notre Dame, Indiana 46556,
hguo@nd.edu
T
he status quo of prohibiting broadband service providers from charging websites for preferential access
to their customers—the bedrock principle of net neutrality (NN)—is under fierce debate. We develop a
game-theoretic model to address two critical issues of NN: (1) Who are gainers and losers of abandoning NN?
(2) Will broadband service providers have greater incentive to expand their capacity without NN? We find that
if the principle of NN is abolished, the broadband service provider stands to gain from the arrangement, as a
result of extracting the preferential access fees from content providers. Content providers are thus left worse
off, mirroring the stances of the two sides in the debate. Depending on parameter values in our framework,
consumer surplus either does not change or is higher in the short run. When compared to the baseline case
under NN, social welfare in the short run increases if one content provider pays for preferential treatment but
remains unchanged if both content providers pay. Finally, we find that the incentive to expand infrastructure
capacity for the broadband service provider and its optimal capacity choice under NN are higher than those
under the no-net-neutrality (NNN) regime, except in some specific cases. Under NN, the broadband service
provider always invests in broadband infrastructure at the socially optimal level but either under- or overinvests
in infrastructure capacity in the absence of NN.
Key words: net neutrality; economics of net neutrality; broadband service providers; content providers;
consumer surplus; social welfare
History: Vallabh Sambamurthy, Senior Editor; Srinivasan Raghunathan, Associate Editor. This paper was
received on May 20, 2007, and was with the authors 10 months for 3 revisions. Published online in Articles
in Advance March 1, 2010.
Introduction
and while a formal definition of the operationalization of the principle does not exist, Hahn and Wallsten
(2006) point out that NN “usually means that broadband service providers charge consumers only once
for Internet access, do not favor one content provider
over another, and do not charge content providers
for sending information over broadband lines to end
users” (p. 1).
Popular online content providers such as Google,
Yahoo!, and Microsoft would like to maintain the status quo, which they claim would preserve the egalitarian philosophy on which the Internet was founded.
Other supporters of the concept include online startups, which claim that it would be almost impossible for them to pay these proposed fees when
their revenue streams are almost nonexistent, because
they have to give away most of their content to
build a loyal customer base (Sydell 2006). Some venture capitalists have even argued that abandoning
NN would result in would-be entrepreneurs becoming more hesitant to start a business, which might
The “net neutrality” debate has reached a fever pitch
as Congress mulls legislation that would allow Internet service providers to charge Web sites for preferred
delivery of digital content.
—“Should the Net Be Neutral,” The Wall Street
Journal Online, May 24, 2006 (WSJ 2006)
The recent proposal by broadband providers such
as Verizon, Comcast, and AT&T to charge popular
websites for preferential access to their residential
and commercial customers has generated widespread
attention in the media (Helm 2006, Waldmeir 2006).
The proposal goes straight to the heart of the debate
on the idea of “net neutrality (NN)”—the phrase that
was first coined by Columbia Law School Professor
Tim Wu—and is used to signify the concept that the
Internet is merely a carrier of online content that does
not distinguish one website from another. The central
idea inherent in this concept is that a “maximally useful public information network aspires to treat all content, sites, and platforms equally” (Wu 2003, p. 142),
60
Cheng, Bandyopadhyay, and Guo: The Debate on Net Neutrality: A Policy Perspective
Information Systems Research 22(1), pp. 60–82, © 2011 INFORMS
61
hurt the competitiveness of American online firms
in the long run (Sydell 2006, Wu 2006a). Vint Cerf,
the renowned computer scientist who is commonly
referred to as one of the “founding fathers of the Internet,” contends that such a payment structure would
result in the Internet increasingly resembling today’s
mass media, where a few Internet service providers
(ISPs) control what the customers effectively may
access (Waldmeir 2006). Tim Berners-Lee, the founder
of the World Wide Web, also favors keeping NN in
place, because “[the Internet] is the basis of a fair
competitive market economy” (Berners-Lee 2006, blog
entry). Finally, some people have voiced their fears of
the ISPs starting to offer such services as Internet telephony to their consumers at rates that undercut rival
providers who would struggle to remain competitive
if they have to pay these fees. This again might result
in stagnation in what has so far remained one of the
most open marketplaces.
The ISPs have argued that they have put their
resources to maintain and upgrade the physical
infrastructure to provide the services to consumers,
while the popular websites have thus far gotten a
“free ride” on their resources1 (Waldmeir 2006) and
that the “Internet service providers should be allowed
to strike deals to give certain websites or services priority in reaching computer users” (Krim 2005, p. D05).
With online content increasing exponentially over the
years, and consumers increasingly becoming used to
broadband access, it will be necessary to meet the
rising costs of increasing capacity and serving an
expanded consumer base. Not having these sources
of revenue might act as a disincentive to upgrade the
service providers’ infrastructure and affect their plans
of increasing existing capacities. That, in turn, would
affect many emerging online services, such as realtime broadband video, which by design, require preferential treatment of their packets. In some ways, the
ISPs contend, the new payment mechanisms might
herald the beginning of new business models that
demand preferential treatment of their packets and
that the “vertical integration of new features and
services by broadband network operators is an essential part of the innovation strategy companies will
need to use to compete and offer customers the services they demand” (Thierer 2004, p. 1).
The proper usage and context of the term “net
neutrality” itself has been subject to confusion (Wu
2006b); an extensive discussion of the issues can be
found in Economides and Tag (2007) and Wu (2003).
In brief, network neutrality aims to address concerns raised by some specific behavior of the broadband service providers: (1) blocking of some content
providers; (2) preferential treatment of one content
provider over another; and (3) transparency failures,
whereby a broadband provider fails to notify its
customers and content providers what service they
offer in terms of estimated bandwidth, latency, etc.
(Wu 2006b). The current proposals by the broadband
service providers (i.e., the ISPs) have raised concerns
around the second issue—i.e., the possibility that one
content or application provider pays the broadband
service provider for preferential treatment of its packets, as the ISP acts effectively as a gatekeeper between
the content providers and the customers it serves.2
The entire debate has raised a number of unanswered questions that are of interest to researchers
and practitioners alike, not to mention the regulatory
agencies. The intensity of the public debate, and the
stakes involved in the issue, were brought into focus
during a House Committee hearing in April 2006 (Wu
2006a), where it was pointed out that “[the Internet]
has become part of America’s basic infrastructure. It
has become as essential to people and to the economy
as the roads, the electric grid, or the telephone. Given
this infrastructure, Americans are accustomed to basic
rights to use the network as they see fit” (p. 43). After
a relatively quiet year in 2007, the NN debate is back
on top of the technology agenda in Washington, with
the lawmakers introducing a new bill, the “Internet
Freedom Preservation Act of 2008” (H. R. 5353) (2008),
on February 12, 2008.
From a policy perspective, two issues are of particular interest. First, the regulatory agencies would like
to know who are the gainers and losers if the principle of NN is abolished. Specifically, if social welfare
increases as a result of abandoning net neutrality—
and more specifically, the end consumers are better off—the idea for the proposed payment mechanisms would gain traction among policy makers. Conversely, if abandoning the principle of NN results
in helping a few private agencies to extract more
rent, the idea would find a much less sympathetic
audience. In the first part of our paper, we analyze
this issue in the NN debate within a game-theoretic
model, where we determine the equilibrium in the
strategies employed by the content providers, which,
in turn, prompts the appropriate profit-maximization
strategy of the Internet service provider.
The second issue of interest to policy makers is to
check the veracity of a key claim of the ISPs: notably,
that under NN, the incentive to expand the capacity of the existing infrastructure for the next generation of broadband services is much less, as compared
1
Economides (2008) notes that “the claim that consumers, content,
or applications providers use the Internet for free is certainly incorrect” (p. 211). For a detailed discussion, see Economides (2008).
2
We use the terms content and applications interchangeably
throughout this paper; similarly, the terms broadband service
provider and ISP are used interchangeably throughout.
62
Cheng, Bandyopadhyay, and Guo: The Debate on Net Neutrality: A Policy Perspective
to when they are allowed to charge the online content providers for preferential treatment. For policy
makers, this is indeed a key issue. Higher capacity
broadband services will enable many services that are
deemed important for the society as a whole. Some
examples of such services include disaster recovery,
remote medical supervision, and the like. For content
providers, the next generation broadband services
will enable instant delivery of high-definition movies,
consumer interactivity, a richer online shopping experience, and so forth, and in the process, open many
new channels of revenue generation. In fact, many
consumers who currently do not feel the need for
broadband services for their typical Internet activities
of e-mail or online shopping might be ready to pay for
such broadband services (Bandyopadhyay and Cheng
2006). In the second half of this paper, we treat infrastructure capacity as a strategic variable for the ISP
in the long run (as opposed to it being a constant
in the short-run problem) and explore two related
issues: (1) Do ISPs have a greater incentive to expand
their capacities if the principle of NN is abandoned?
(2) How do the optimal capacity choices under NN
differ from those when NN is not longer enforced?
From the analytical perspective, what drives the
problem is the increased latency of the applications
and content of those providers that are given less
favorable treatment by the ISP. In other words, the
packets from these providers face increased congestion, which translates into a delay disutility for the
end users. Thus, while a consumer might have some
intrinsic preferences of favoring one content provider
over another, these preferences can be modified by
one’s ISP by decreasing the delay disutility of one
provider’s packets over another’s. A proper analysis
of the problem therefore demands the modeling of
the objectives of all three players involved—the content providers, the consumers, and the ISP (Hahn and
Wallsten 2006). This exercise is distinct and different
from the two-player models that analyze the broadband service provider that provides different classes
of service to the consumers (Bandyopadhyay and
Cheng 2006, Bhargava and Sun 2005). It is imperative
that this distinction be highlighted, because the NN
principle has sometimes been misinterpreted as a barrier to the ability of the broadband service provider to
charge consumers different prices for different classes
of service. As existing broadband service offerings
indicate, ISPs today already charge different prices for
different classes of broadband connection,3 and such
3
In the authors’ neighborhood (in a medium-sized university town), for example, the cable broadband service provider
has broadband download speed offerings of an “introductory”
256 kbps, for $25 per month (excluding taxes and regular fees) and
“regular” speeds of 7 Mbps (for $40) and 12 Mbps (for $55).
Information Systems Research 22(1), pp. 60–82, © 2011 INFORMS
Figure 1
Schematic of the Model
Content provider #1
(e.g., company Y )
Internet backbone
Broadband service
provider at local loop
End
consumers
Content provider #2
(e.g., company G)
price discrimination strategies enhance social welfare
(Bandyopadhyay and Cheng 2006, Edell and Varaiya
1999, Hermalin and Katz 2007). Finally, in analyzing the NN debate, we are not concerned about how
hosting service providers charge content providers for
hosting or transmitting their content over the World
Wide Web (see Figure 1) or the various ways (like Web
caching, for example) by which content providers
have their content delivered faster. In the NN debate,
the issue is whether the broadband service provider
should be allowed to charge content providers for
transmitting their content from its local switching
office to the consumers.4 In other words, the issue of
interest is only at the local loop, the part encircled
by the dashed line in Figure 1. Thus the debate is
not about how Tier-1 or Tier-2 ISPs charge content
providers, but about how local Tier-3 ISPs serving the
end users propose to charge the content providers.
For a very good discussion on the three tiers of ISPs,
see Kurose and Ross (2003, §1.5). For a discussion on
some of the early works on Internet pricing itself, one
is referred to Gupta et al. (1996, 1997), two of the seminal papers in this area that rigorously analyzed the
problem. In contrast to that literature, which looks at
the problem of congestion at the Internet backbone, the
NN issue looks at the issue of the congestion over the
last mile.
Thus the role of the broadband service provider
that we need to model is not that of a producer of
the service of providing hosting services to the content providers (and in most cases, the hosting service
provider is different fr…
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