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Dark clouds over the Internet?

Author

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  • Prüfer, Jens
  • Jahn, Eric

Abstract

Currently, the Internet is characterized by excess capacity, which benefits consumers and producers of Internet-based services alike. High quality and declining prices of interconnection are the basis for many e-commerce, software and equipment businesses. However, tough competition in the Internet backbone market driving these developments could ruin network operators and threaten other markets, too. This paper will pursue the idea of the Internet backbone market's decline based on standard economic theory. The paper will present several scenarios and discuss potential market- and policy-based remedies. It is argued that due to a phenomenon called capacity paradox the industry's future development is overshadowed by "dark clouds".

Suggested Citation

  • Prüfer, Jens & Jahn, Eric, 0. "Dark clouds over the Internet?," Telecommunications Policy, Elsevier, vol. 31(3-4), pages 144-154, April.
    • Handle: RePEc:eee:telpol:v:31:y::i:3-4:p:144-154
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    Cited by:

    1. Jahn, Eric & Prüfer, Jens, 2008. "Interconnection and competition among asymmetric networks in the Internet backbone market," Information Economics and Policy, Elsevier, vol. 20(3), pages 243-256, September.
    2. Alexei A. Gaivoronski & Per Jonny Nesse & Olai Bendik Erdal, 2017. "Internet service provision and content services: paid peering and competition between internet providers," Netnomics, Springer, vol. 18(1), pages 43-79, May.

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