Johannes M. Bauer

The European market for mobile data: evolving value chains and industry structures

Abstract Whether Europe will be able to maintain its strong position in mobile telecommunications will depend to a large degree on the transition to the next generation technology. Unlike other countries and regions that have embarked on a more gradual transition model, European policy-makers and industry leaders envision a rapid introduction of the next platform, the Universal Mobile Telecommunications System (UMTS). This paper describes the key factors that will shape this transition and the challenges faced by the main stakeholders. The new industry value chain, corporate resources and skills, and the economic and regulatory context of UMTS will jointly determine corporate strategies and the resulting competitive and informational characteristics of the industry.

Electronic Commerce and the Local Merchant

Much of the rhetoric about Web-based electronic commerce focuses on its use in reaching global markets. Yet not all businesses can or should target global audiences. The literature on electronic commerce to date does not provide adequate guidance about the ways that local merchants can exploit synergies between their local physical presence and electronic commerce on the Web. In this paper, potential synergies, such as using a combined physical and virtual presence to improve trust, help consumers manage risk, meet diverse shopping preferences, and taking advantage of natural physical-virtual complementarities, are developed. We follow with a brief empirical analysis that illustrates the relative lack of use of these synergies among small and medium sized enterprises having a physical presence in a local market. We conclude that there is a mismatch between electronic commerce rhetoric and the capabilities of many local businesses, and policy makers may need to take a more local approach to electronic commerce in order to prevent it from becoming a threat to local economies.

Internet access in the European Union and in the United States

In Europe and the US demand for Internet access is growing rapidly. Recent data provide evidence that the gap between these regions is once again increasing. Controlling for selected structural and corporate strategic factors, this paper examines the effects of public policies towards traditional communications infrastructures on Internet access. We analyze the nexus between these variables at a qualitative and quantitative level. Based on a pooled set of data, our empirical results indicate a significant influence of policies affecting market entry and the pricing of services on Internet access. Thus, contrary to the view of the Internet as a regulation-free space, important direct and indirect effects originate from regulatory policy.

Designing Socio-Technical Systems

Publisher Summary A diverse body of research in engineering and the social sciences documents the working of systems that require technical artifacts and social arrangements to function. Single plants, firms, or entire industrial sectors constitute socio-technical systems if technological components and social arrangements are so intertwined that their design requires the joint optimization of technological and social variables. Social and technical subsystems are intertwined and each has multiple layers that are designed and evolve on different time scales. Multi-level systems have been more widely studied by social scientists than by engineers in institutional approaches. Design decisions are made at all layers but the scope for such choices is generally broader at the lower layers. Consequently, in higher layers of the socio-technical system, deliberate design decisions become less prevalent and emergent characteristics become more important. Continuous and specific design choices are made at the operational and management layer. These design decisions are constrained by design choices at the governance layer. Design decisions are made at that layer although the decision-makers typically are different.

Impact of license fees on the prices of mobile voice service

Abstract In response to rapidly growing demand for wireless services, regulatory agencies have introduced license fees to enhance the efficiency of spectrum use. The impact of such fees on the market for mobile services is poorly understood. Under certain conditions, license fees are sunk and thus inconsequential for firm decisions. Given the economic and institutional setup of the mobile markets real effects of license fees are possible. The paper reviews the conditions under which these different scenarios are likely, and develops an empirical test for the nexus between license fees and prices. Despite weak hints that license fees influence prices, in the examined GSM and PCS markets no statistically significant evidence for lasting effects could be detected.

Economics of Malware

In many cases, an economic perspective on cybersecurity – and malware in particular – provides us with more powerful analysis and a fruitful starting point for new governmental policies: incentive structures and market externalities. This report sets out to develop this perspective, building on the innovative research efforts of the past six years. More work is needed, however. As we will see, most of the research so far has been based on the methods of neoclassical and new institutional economics. While powerful, these methods are based on rather stringent assumptions about how actors behave – such as their rationality, their security tradeoffs and the kind of information they have – and how they interact with their institutional environment. We discuss the implications of these neoclassical and new institutional approaches in more detail in the next chapter. For now, we briefly key mention three limitations: (1) they provide limited insight into how actors actually perceive the cost, benefits and incentives they face; (2) they have difficulties taking into account dynamic and learning effects, such as how a loss of reputation changes the incentives an actor experiences; and (3) they treat issues of institutional design as somewhat trivial. That is to say, the literature assumes that its models can indicate what market design is optimal, that this design brought into existence at will and that actors will behave as the model predicts. If the past decade of economic reforms – such as privatization, liberalization and deregulation – have taught us anything, it is that designing markets is highly complicated and sensitive to context. It cannot be based on formal theoretical models alone. Institutional design requires an in-depth empirical understanding of current institutional structures.To provide the basis for new policies, we propose to complement the state-of-the-art understanding of the economics of malware with qualitative field research that provides empirical evidence on the way in which actors actually make security tradeoffs, how they perceive their institutional environment, the incentives they face and how these have changed, as well as the externalities that arise from these incentive structures.

Learning from each other: promises and pitfalls of benchmarking in communications policy

Purpose – International benchmarking is increasingly used to inform information and communications policy. The paper aims to discuss the conditions under which learning from the experience in other jurisdictions (communities, nations, and super‐national regions) is possible.Design/methodology/approach – Research from different disciplines is reviewed and synthesized to provide an integrated conceptual framework that can be used to design more robust international benchmarking approaches.Findings – Drawing lessons from the policy experience in other jurisdictions is more difficult than is commonly perceived. Nonetheless, as long as the conditions for policy learning are met and it is properly done, international comparisons yield valuable data that can be used to improve the design of information and communications policy.Research limitations/implications – In conducting internationally comparative inquiries, researchers need to ascertain that the prerequisites of the methods employed are aligned with the ...

Universal service in the European Union

Abstract Since the late 1980s, the European Union (EU) has pursued a program of comprehensive telecommunications liberalization. The increased reliance on competition necessitated the establishment of explicit universal service policies. European universal service policies define the scope and cost of universal service as well as permissible funding mechanisms. Emphasizing competition over social goals, the EU has adopted a rather narrow version of universal service. Future revisions may provide an opportunity to adopt a more ambitious universal service model.

Economics of Fighting Botnets: Lessons from a Decade of Mitigation

The fight against botnets has been going on for more than a decade, but they still impose significant costs. ISPs have become increasingly central to the effort, as they can undertake mitigation more economically and efficiently than end users. A study evaluates the role and performance of ISPs in botnet mitigation across 60 countries.

Reconciling Political and Economic Goals in the Net Neutrality Debate

The net neutrality debate is one of several sites of struggles to adapt and redefine rights and obligations of stakeholders in the Internet-centric communications system. Its outcomes will shape the future of the Internet and influence the level and distribution of its benefits. We identify key values that drive the net neutrality discussion and examine the governance mechanisms proposed to achieve these objectives. We find that there is no single policy instrument that allows realization of the range of valued political and economic objectives simultaneously. Contrary to some of the claims advanced in the current debate, safeguarding multiple goals requires a combination of instruments that will likely involve government and nongovernment measures. Furthermore, promoting goals such as the freedom of speech, political participation, investment, and innovation calls for complementary policies.