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Complementary innovation and network neutrality

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  • Bauer, Johannes M.
  • Knieps, Günter

Abstract

One of the central goals of network neutrality policies is to safeguard Internet-based innovation. Historically, entrepreneurial activities in applications and services were a main driver of innovation and stimulated complementary advances in networking. With the increasing heterogeneity of services, this virtuous cycle of complementary innovation is changing. Building on evolutionary theories of innovation and the notion of general-purpose technologies, we examine how these changes affect Internet-based innovation. In this framework, we analyze the effects of network neutrality policies on innovation dynamics. Our analysis reveals that network neutrality regulations as currently implemented may impede and delay innovation experiments that require a differentiated quality of service arrangements. To overcome such undesirable effects on innovation, we propose an approach that allows safeguarding important goals of network neutrality while permitting a differentiation of network services in support of next-generation innovation.

Suggested Citation

  • Bauer, Johannes M. & Knieps, Günter, 2018. "Complementary innovation and network neutrality," Telecommunications Policy, Elsevier, vol. 42(2), pages 172-183.
    • Handle: RePEc:eee:telpol:v:42:y:2018:i:2:p:172-183
    DOI: 10.1016/j.telpol.2017.11.006
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    Cited by:

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    2. Günter Knieps, 2017. "Internet of Things, future networks, and the economics of virtual networks," Competition and Regulation in Network Industries, , vol. 18(3-4), pages 240-255, September.
    3. Knieps, Günter, 2019. "Internet of Things, big data and the economics of networked vehicles," Telecommunications Policy, Elsevier, vol. 43(2), pages 171-181.
    4. Guenter Knieps, 2021. "Data-driven sector coupling in 5G-based smart networks," Competition and Regulation in Network Industries, , vol. 22(1), pages 53-68, March.
    5. Günter Knieps, 2019. "Internet der Dinge und die Zukunft der Netzökonomie [Internet of Things and the Future of Network Economics]," Wirtschaftsdienst, Springer;ZBW - Leibniz Information Centre for Economics, vol. 99(5), pages 348-354, May.
    6. Briglauer, Wolfgang & Stocker, Volker & Stockhammer, Paul, 2019. "Ist Netzneutralität tatsächlich gut? Eine Neubewertung vor dem Hintergrund der Regulierung in den USA und in der EU sowie aktueller Forschungsergebnisse," Policy Notes 38, EcoAustria – Institute for Economic Research.
    7. Stocker, Volker & Whalley, Jason, 2019. "Who replies to consultations, and what do they say? The case of broadband universal service in the UK," Telecommunications Policy, Elsevier, vol. 43(8), pages 1-1.
    8. Briglauer, Wolfgang & Stocker, Volker & Whalley, Jason, 2020. "Public policy targets in EU broadband markets: The role of technological neutrality," Telecommunications Policy, Elsevier, vol. 44(5).
    9. Bauer, Johannes M. & Bohlin, Erik, 2022. "Regulation and innovation in 5G markets," Telecommunications Policy, Elsevier, vol. 46(4).
    10. Knieps, Günter & Bauer, Johannes M., 2022. "Internet of things and the economics of 5G-based local industrial networks," Telecommunications Policy, Elsevier, vol. 46(4).
    11. Bauer, Johannes M., 2022. "Toward new guardrails for the information society," Telecommunications Policy, Elsevier, vol. 46(5).
    12. Siddhartha Menon, 2021. "An Institutional Analysis of TMP Regulation in India," Review of Policy Research, Policy Studies Organization, vol. 38(3), pages 300-325, May.
    13. Bauer, Johannes M. & Prado, Tiago S., 2020. "Lessons from Innovation Economics for Digital Platform Policy," ITS Conference, Online Event 2020 224846, International Telecommunications Society (ITS).

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