The Internet: A Future Tragedy of the Commons?

Abstract

"In the future data communication networks interoperability becomes critical from both technological and business strategy perspective. Significance of interoperability has to be evaluated in terms of the overall economic performance of the system. In this paper we will present our view of the future of data communication networks, challenges in interoperability, and the economic challenges that will arise in this 'real time' economy. We will provide insights derived from general equilibrium approach to these networks, e.g., what are the impacts of competition and interoperability on the competing entities which will own different parts of the network. We believe that potential excessive congestion is the single biggest obstacle in the feasibility of a global, interoperable network. We will discuss the simulation experiments we have carried out to determine approximate priority prices in real-time and discuss the potential benefits in managing congestion through such a pricing scheme. We define a framework for the policy research for an interoperable network which may facilitate electronic commerce. We also discuss the issues related to the market structure such as monopoly, duopoly, and more competitive ownership of the parts of the network and its impact on interoperability, efficiency, and economic performance of the system."