Digital Markets Act: Shaping A New Pro-Competitive Modality of EU Competition Rules
Abstract: An unprecedented revision of the rules regulating the functioning of competition in the digital markets has catalysed diverse reactions among the main stakeholders. The proposed approach to regulating gatekeepers will have a paradigmatic impact on European consumers, businesses and public institutions. It will have equally significant implications for the theoretical foundations of competition law, economics and policy.
While formally the proposed Digital Markets Act (DMA) is complementing, not substituting, existing provisions of competition, such a substantial extension of the rationale and instruments of competition policy is likely to have significant implications also for the application of ex-post rules. The entire apparatus of competition law will be extended by the new modality.
On one hand, such an extension may be seen as an enrichment. For decades, the great variety of the ideas about economic competition and its regulation have been substantially narrowed down and standardised by the Law & Economics analysis. On the other hand, however, the proposed recalibration is likely to raise many additional issues and challenges for the discipline.
Out of the wide spectrum of changes introduced by the DMA proposal, this presentation identifies and analyses one of the central – though not so commonly discussed – elements of the transformation. It asks a normative question about what kind of competition in the digital markets the European Union should seek to establish, and amethodological question about procedural and substantive legal mechanisms used for shaping such a new format.
Oles Andriychuk (PhD, European University Institute, Florence; Charles University in Prague) is a Senior Lecturer in Competition and Internet Law at the School of Law, University of Strathclyde, Glasgow. He also is Co-Director ofStrathclyde Centre for Internet Law and Policy (SCILP) and Member of the Strathclyde Centre for Antitrust Law and Empirical Study (SCALES). In his research, Dr Andriychuk focuses on competition in the digital markets, intersections between competition law and legal philosophy, and the constitutional foundations of economic competition. His recent book “The Normative Foundations of European Competition Law: Assessing the Goals of Antitrust through the Lens of Legal Philosophy” has been published with Edward Elgar in 2017 and is available here: https://www.e-elgar.com/shop/gbp/the-normative-foundations-of-european-competition-law-9781786436061.html
Platform Mergers and Antitrust
Abstract: Should Internet era merger policy differ from Industrial era merger policy? Platform ecosystems rely on economies of scale, data-driven economies of scope, high quality algorithmic systems,and strong network effects that frequently promote winner-take-most markets. Their market dominance has generated competition concerns that appear difficult to assess with traditional merger policy tools. This paper examines the acquisition strategies of the five major U.S. platforms—Google, Amazon, Facebook, Apple, and Microsoft—since their inception. We discuss the main merger and acquisition theories of harm and how these operate differently than in the past. To address M&A concerns of multi-sided platforms, we develop four proposals that incorporate (1) a new ex-ante regulatory framework, (2) an update of the conditions under which the notification of mergers should be compulsory and the burden of proof should be reversed, (3) differential regulatory priorities in investigating horizontal versus vertical acquisitions, and (4) an update of competition enforcement tools to increase visibility into market data and trends.
Geoffrey Parker is a professor of engineering at Dartmouth College and serves as Director of the Master of Engineering Management Program. He is also a research fellow at MIT’s Initiative for the Digital Economy where he leads platform industry research studies and co-chairs the annual MIT Platform Strategy Summit. He received a B.S.E. from Princeton and M.S. and Ph.D. from MIT. Parker has made significant contributions to the field of network economics and strategy as co-developer of the theory of “two-sided” markets. He is co-author of the book “Platform Revolution,” published in ten languages. Parker won the Thinkers50 2019 Digital Thinking Award, along with Marshall Van Alstyne, for the concepts of the inverted firm, two-sided markets, and how firms can adapt and thrive in a platform economy. In Spring 2020, he was elected as a Fellow of the Production and Operations Management Society. In Fall 2020 he joined the World Economic Forum’s Global Future Council on Advanced Manufacturing and Production. He also joined an expert panel of the European Commission to provide commentary and feedback on the proposed EU Digital Markets Act. Parker is a frequent keynote speaker and advises senior leaders on their organizations’ platform strategies. Speaking engagements are handled by the Stern Strategy Group.
Playlisting Favorites: Measuring Platform Bias in the Music Industry
Abstract: Platforms are growing increasingly powerful, raising questions about whether their power might be exercised with bias. While bias is inherently difficult to measure, we identify a context within the music industry that is amenable to bias testing. Our approach requires ex ante platform assessments of commercial promise – such as the rank order in which products are presented – along with information on eventual product success. A platform is biased against a product type if the type attains greater success, conditional on ex ante assessment. Theoretical considerations and voiced industry concerns suggest the possibility of platform biases in favor of major record labels, and industry participants also point to bias against women. Using data on Spotify curators’ rank of songs on New Music Friday playlists in 2017, we find that Spotify’s New Music Friday rankings favor independent-label music, along with some evidence of bias in favor of music by women. Despite challenges that independent-label artists and women face in the music industry, Spotify’s New Music curation appears to favor them.
Luis Aguiar is Assistant Professor in the Management of Digital Transformation in the Department of Business Administration at the University of Zurich, Switzerland. He holds a PhD in Economics from Universidad Carlos III de Madrid, an MSc in Economics, Finance and Management from Universitat Pompeu Fabra in Barcelona, and a Masters’ Degree in Economics from the University of Geneva, Switzerland. Prior to his appointment at the University of Zurich he was a Research Fellow in the Digital Economy Unit at the European Commission’s Joint Research Center in Seville, Spain.
His research focuses on the economics of digitization and online markets. His work relies on various econometric methods to analyze the effects of technological change on firms, consumers, markets, and welfare, with a particular focus on digital media products. His research has been published in leading academic journals, including the Journal of Political Economy, Information Systems Research, the Journal of Industrial Economics, and the International Journal of Industrial Organization. His research has also been covered by various news outlets, including The Economist, The Wall Street Journal, Forbes, CNBC, and Billboard Magazine. He is currently serving as a co-editor for Information Economics and Policy.
Data-Driven Approaches to Understanding Hateful Content and Moderation Interventions on the Web
Abstract: The Web has revolutionized the way people receive, consume, and interact with information. At the same time, unfortunately, the Web offers a fertile ground for amplifying socio-technical issues like the spread of hateful content and false information; hence there is a pressing need to develop techniques and tools to understand, detect, and mitigate these issues on the Web. In this talk, I will present our data-driven quantitative approach towards understanding such emerging socio-technical problems, focusing on the spread of hateful content targeting specific demographic groups. Also, I will present our work on understanding mitigation strategies employed by social networks (i.e., moderation interventions) and assessing their effectiveness towards reducing the prevalence and impact of these issues on the Web.
Savvas Zannettou is a Postdoctoral Researcher at Max Planck Institute for Informatics (MPI-INF), working under the guidance of Prof. Anja Feldmann and Prof. Krishna Gummadi. He is also a core member of the International Data-driven Research for Advanced Modeling and Analysis Lab (iDrama Lab). His research focuses on applying machine learning and data-driven quantitative analysis to understand emerging phenomena on the Web, such as the spread of false information and hateful rhetorics. His research has been published at top-tier conferences such as ICWSM and ACM IMC. He and his co-authors have received best/distinguished paper awards at ACM IMC 2018 and CyberSafety 2019.
Antitrust Welfare and Remedies for Platform Monopoly
Abstract: The goal of the antitrust laws should be to manage firm conduct and structure in a way that encourages maximum sustainable market output. Neoliberals, and Robert Bork in particular, did antitrust a considerable disservice by pushing for lower output solutions in the name of something that they misnamed “consumer welfare.” In fact, the antitrust-welfare enforcement curve is an inverted U, with both overderrent and underdeterrent rules leading to lower output, although for different reasons.
Digital platforms, even the large ones, are not winner take all markets; they need exclusionary practices in order to maintain dominance. As a result, properly tailored injunctions are often a promising way to control competition without interfering unreasonably with efficient operations. Another promising way is compelled interoperability, which can serve to extend positive network effects over a wider range and thus benefit rather than harm consumers and the other constituents who are affected by their behavior.
Herbert Hovenkamp is the James G. Dinan University Professor, Penn Law and the Wharton School, University of Pennsylvania. He is a Fellow of the American Academy of Arts and Sciences, and in 2008 received the Justice Department’s John Sherman Award for lifetime contributions to antitrust law. His principal antitrust scholarship includes Antitrust Law (with the late Phillip E. Areeda and the late Donald F. Turner, 1978-2021); and Federal Antitrust Policy: the Law of Competition and its Practice (6th ed. 2020). His legal history writing includes The Opening of American Law, 1870-1970 (Oxford, 2015); Enterprise and American Law, 1836-1937 (Harvard, 1991). For an expanded version of his views on antitrust policy and digital platforms, see Antitrust and Platform Monopoly, 130 Yale L.J. 1952 (2021).
The Data Governance Act – The Legal Perspective
Abstract: The proposal of the Data Governance Act is part of a broader EU policy initiative with respect to data regulation. As consequence of its data strategy, the EU has presented different regulative proposals. In this talk, the Data Governance Act shall be evaluated from a legal perspective.
Moritz Hennemann is a University Professor at the University of Passau Law Faculty, Germany, holding the Chair for European and International Information and Data Law. He is also the Director of the Research Center for the Law of Digitization at Passau Law Faculty. His research focuses mainly on the data-driven economy and its legal framework – especially with respect to Contract Law, Data (Protection) Law, Anti-Trust Law, and Media Law as well as Comparative Law. In Fall Term 2018, Moritz Hennemann was a Visiting Researcher at Harvard Law School. Before coming to Passau, he has conducted his research as a Post Doc at University of Freiburg Law Faculty.
Valerie Reif and Nicolò Rossetto
The energy sector in the digital age: new transactions and governance needs
Abstract: Digitalisation enormously increases the availability and usability of data in the energy system. By lowering transaction costs, digitalisation enables the coordination, based on market signals, of a growing number of energy assets connected to distribution grids like rooftop PV panels, batteries and heat pumps. Next to the traditional business-to-business transactions at the wholesale level (B2B) and to the likewise traditional business-to-consumer transactions at the retail level (B2C), new exchanges consumer-to-consumer (C2C) become possible. Thanks to digitalisation, individuals, small and medium-sized non-energy enterprises and other organisations can trade their surplus energy or activate demand response to provide flexibility to their peers or the energy system.
These new transactive energy models can take several forms and have important implications for energy regulation and policy. The European climate goal to reach net-zero greenhouse gas emissions by 2050, for instance, relies on the efficient and effective coordination of millions of devices across energy vectors and end-uses: C2C transactions can be a way to achieve such coordination and the following energy system integration.
Automated data exchange and interoperability are necessary to unleash the full potential of these disruptive models. However, appropriate governance for interoperability must be in place to deal with the fragmented ICT landscape in the energy sector and the lack of a customer-centric approach by traditional market players.
In this Plamadiso Talk, Nicolò Rossetto presents some of the forms in which new C2C transactions in the energy system can be organised. Later, Valerie Reif discusses the governance challenges raised by the need to secure a seamless exchange and interoperability of energy data.
Valerie Reif is a Research Associate in electricity regulation at the Florence School of Regulation, European University Institute in Italy. Her main research interests are energy data exchange, interoperability, and the EU Electricity Network Codes. She is involved in two H2020 research projects on TSO-DSO-consumer coordination (INTERRFACE, OneNet). Before joining FSR in September 2018, Valerie worked at the Technology Platform Smart Grids Austria. Valerie holds both a BSc and an MSc degree in Renewable Energy Engineering and a BA in European Studies.
Nicolò Rossetto is a Research Associate in electricity regulation at the Florence School of Regulation, European University Institute in Italy. His main research interests are the digitalisation of energy, energy communities, peer-to-peer energy trading, and the integration of renewables in the electricity sector. Before joining FSR in September 2016, Nicolò was an external advisor to the World Bank, founding member of the Energy Watch at ISPI (Milan) and teaching assistant at the University of Pavia (Italy). Graduated first in Political Science and then in International Economics, Politics and Institutions, Nicolò holds a PhD in Law and Economics.
Attention Economics of Instagram Stars: #Instafame and Sex Sells?
Abstract: Popular content providers on social media, so-called influencers, represent a novel star-type of the digital era. In contrast to stars of traditional media, they build their (rapidly growing) audiences within the system of social media platforms. This star-type creates stardom with uploads on social media pages like YouTube, TikTok or Instagram. One of the most popular platforms, especially designed to upload picture contents, is the service “Instagram” owned by Facebook. The growing social, cultural and economic power of this star phenomenon raises the question: What are key drivers of Instagram success? This paper empirically analyses 500 top Instagram stars within the categories (1) fashion and beauty, (2) fitness and sports, (3) music, (4) photo and arts, (5) food and vegan. The unbalanced panel data set consists of 100 stars within each category over an observation period of five months. The data (retrieved from Heepsy.com) provides information on popularity measurements, such as subscribers, likes and comments, and most importantly, price estimates per post. Since influencers are not paid by the platform, but mainly by advertisers for promotion of their products, the estimated price per upload is a valid proxy for income and economic success. Therefore, by the means of panel regression estimations, I can statistically analyse the influence of popularity factors and upload behaviour on income. Next to various control variables, I add a variable for body exposure, measuring the degree of nudity on the account. Combined with information on both (i) sex of the account and (ii) sex of the main target group, this gives interesting insights into consumption behaviour and preferences of social media users. The results reflect theoretical assumptions of attention economics and (sustainable) audience building; Instagram stars can strategically influence their success by specific upload behaviour.
Sophia Gaenssle (M.Sc.) is a junior researcher at the chair of Economic Theory at the Ilmenau University of Technology. She specialises in media and cultural economics, with particular emphasis on industrial organisation and digital markets.
When Does it Pay Off to Learn a New Skill? Revealing the Complementary Benefits of Cross-Skilling
Abstract of the corresponding working paper (https://arxiv.org/abs/2010.11841): This work examines the economic benefits of learning a new skill from a different domain: cross-skilling. To assess this, a network of skills from the job profiles of 14,790 online freelancers is constructed. Based on this skill network, relationships between 3,480 different skills are revealed and marginal effects of learning a new skill can be calculated via workers’ wages. The results indicate that learning in-demand skills, such as popular programming languages, is beneficial in general, and that diverse skill sets tend to be profitable, too. However, the economic benefit of a new skill is individual, as it complements the existing skill bundle of each worker. As technological and social transformation is reshuffling jobs’ task profiles at a fast pace, the findings of this study help to clarify skill sets required for designing individual re-skilling pathways. This can help to increase employability and reduce labour market shortages.
Fabian Stephany is a Researcher in Computational Social Science at the OII, University of Oxford, a Research Affiliate at the Humboldt Institute for Internet and Society in Berlin and a Research Fellow at the Wittgenstein Centre for Demography and Global Human Capital in Vienna. Fabian is interested in the application of computational social science in fields like digital skills, migration, innovation, and e-governance. With the iLabour project at the OII, he studies the global dynamics of Online Labour Markets. Fabian holds a PhD and degrees in Economics and Social Sciences from different European institutions, including Universitá Bocconi Milan and University of Cambridge. As an Economist and Senior Data Scientist, Fabian has been working in the private sector and for various actors in the international policy landscape, such as the United Nations Development Programme, the World Bank or the OECD in Paris.
Symposium on the Web and Internet Policy
In case you have questions, please do not hesitate to contact us:
Dr. Volker Stocker
Prof. Georgios Smaragdakis (email@example.com)
Lilian Edwards (Newcastle University)
Nikos Laoutaris (IMDEA Networks)
Krishna Gummadi (Max Planck Institute for Software Systems)
William Lehr (MIT)
David D. Clark (MIT)
Scott Marcus (Bruegel)
Christopher Yoo (U Penn)
"Policy choices can help keep universal broadband targets affordable: A spatial model of 4G and 5G rollout in developing countries"
Abstract: In recognition of the transformative opportunities that broadband connectivity presents, the United Nations Broadband Commission has committed the international community to accelerate universal access across the developing world. However, the cost of meeting this objective, and the feasibility of doing so on a commercially viable basis, are not well understood. This paper compares the global cost-effectiveness of different infrastructure strategies for the developing world to achieve universal 4G or 5G mobile broadband. Utilizing remote sensing and geospatial infrastructure simulation, least-cost network designs are developed for eight representative low and middle-income countries (Malawi, Uganda, Kenya, Senegal, Pakistan, Albania, Peru and Mexico), the results from which form the basis for aggregation to the global level. To provide at least 2 Mbps per user, 4G is often the cheapest option, whereas a minimum 10 Mbps per user is cheapest with 5G non-standalone (NSA). The cost of meeting the UN Broadband Commission target of a minimum 10 Mbps per user is estimated at $1.4 trillion using 5G NSA, equating to approximately 0.5% of annual GDP for the developing world over the next decade. However, by creating a favorable regulatory environment governments can bring down these costs by as much as three quarters – to $0.5 trillion (approximately 0.2% of annual GDP) – and avoid the need for public subsidy. Providing governments make judicious technology choices, while adopting fiscal and regulatory regimes conducive to lowering costs, broadband universal service may be within reach of most developing countries over the next decade.
Edward Oughton (https://science.gmu.edu/directory/edw…) is known for developing decision-support models of digital infrastructure, having carried out 5G assessments for countries around the world. His work provides evidence on effective strategies to connect more people to a faster internet. Such information is vital for ensuring sustainable economic development as most new technologies require internet connectivity. The open-source 5G assessment software he has developed has been used to support national and international policy decisions.
"The Lockdown Effect: Implications of the COVID-19 Pandemic on the Internet Traffic”
Georgios Smaragdakis is a Professor with Technical University (TU) Berlin, heading the Chair of Internet Measurement and Analysis. He is also a research affiliate with Max Planck Institute for Informatics and a research collaborator with Akamai Technologies.
In the talk, he will present a recently published paper that appeared at ACM Internet Measurement Conference (https://conferences.sigcomm.org/imc/2020/) in which the authors examine the effect of the lockdowns on traffic shifts, by collecting and analyzing network data from a diverse set of vantage points (one ISP, three IXPs, and one metropolitan educational network).
Abstract of the corresponding paper: Due to the COVID-19 pandemic, many governments imposed lock- downs that forced hundreds of millions of citizens to stay at home. The implementation of confinement measures increased Internet traffic demands of residential users, in particular, for remote working, entertainment, commerce, and education, which, as a result, caused traffic shifts in the Internet core. In this paper, using data from a diverse set of vantage points (one ISP, three IXPs, and one metropolitan educational network), we examine the effect of these lockdowns on traffic shifts. We find that the traffic volume increased by 15-20% almost within a week while overall still modest, this constitutes a large increase within this short time period. However, despite this surge, we observe that the Internet infrastructure is able to handle the new volume, as most traffic shifts occur outside of traditional peak hours. When looking directly at the traffic sources, it turns out that, while hypergiants still contribute a significant fraction of traffic, we see (1) a higher increase in traffic of non-hypergiants, and (2) traffic increases in applications that people use when at home, such as Web conferenc- ing, VPN, and gaming. While many networks see increased traffic demands, in particular, those providing services to residential users, academic networks experience major overall decreases. Yet, in these networks, we can observe substantial increases when considering applications associated to remote working and lecturing.
"Communication behaviour in Germany"
Serpil Taş is a Senior Economist at the Wissenschaftliches Institut für Infrastruktur und Kommunikationsdienste (WIK). For more information about her research focus please visit her website at the WIK:
"Explaining Explanations in AI"
Leilani H. Gilpin is a PhD. candidate in Electrical Engineering and Computer Science at the Massachusetts Institute of Technology (MIT) in CSAIL. Her research focuses on the theories and methodologies towards monitoring, designing, and augmenting machines that can explain themselves for diagnosis, accountability, and liability.
Weizenbaum Symposium: "New Perspectives on the Digital Economy - Sharing, Gigs, and Platforms"
The one-day symposium will provide a novel venue for researchers across fields (e.g., economics, sociology, information systems, law, communication) to present their work on the digital economy and debate a wide array of issues in an international research environment.
Arto Lanamäki (University of Vaasa and Tallinn University)
Grant Blank (Oxford Internet Institute)
Jason Whalley (Northumbria University)
Anton Fedosov (University of Zurich)
Niels van Doorn (University of Amsterdam)
Gemma Newlands (University of Amsterdam and BI Norwegian Business School)
Mareike Möhlmann (Bentley University)
Bettina Berendt (Weizenbaum-Institute/TU Berlin/KU Leuven)
Aaron Kolleck (Weizenbaum-Institute/TU Berlin)
Heli Koski (Etla/Aalto University)
Sofia Ranchordas (University of Groningen)
Justus Haucap (DICE/HHU Düsseldorf)
Weizenbaum Colloquium: "An Ex-post Assessment of the Economic Benefits of High-Speed Broadband Coverage and Adoption: First Evidence from OECD Member States" by Dr. Wolfgang Briglauer
A broad-scale roll-out of new high-speed broadband infrastructure based on fiber-optical transmission technology is expected to generate innovative broadband services for consumers and to bring enormous potential for productivity increases and economic growth for the overall economy. In order to reach specified broadband targets regarding broadband coverage and service adoption and due to high expectations regarding future benefits of fiber-based broadband infrastructure, many local and national governments have already provided billions of Euros for public funding measures. However, there is hardly any evidence available on the causal impact of fiber-based broadband coverage on the supply side and adoption of services on the demand side on relevant economic outcome variables. Moreover, there is no study available so far that simultaneously considers the impact of fiber-based broadband coverage and adoption on economic performance using detailed data on fiber-based high-speed broadband connections. Both effects are, however, of crucial relevance in view of the dual broadband targets at national and supra-national level and related supply- and demand-side public policies.
In order to investigate these issues empirically, we employ comprehensive panel data for 34 OECD countries for the years from 2003-2018 and panel fixed effects and instrumental variables estimation techniques. In order to endogenize the investment and adoption decision, we define micro-models of both investment and adoption of fiber-based broadband to account for potential simultaneity underlying broadband investment and adoption on the one hand and GDP on the other hand.
"Data Portability in Digital Markets: Economic Implications and Policy Recommendations"
Jan Krämer is a Professor for Information Systems at the University of Passau, Germany, where he holds the Chair for Internet & Telecommunications Business and is the director of the Passau International Centre for Advanced Interdisciplinary Studies. He is also the Joint Academic Director at the Centre on Regulation in Europe (CERRE), a Brussels-based think tank.
In his talk, Jan Krämer will present a current view on the legal, technical and economic state of the discussion on personal data portability in the context of the digital economy. First, He will briefly lay out the legal framework for data portability in the EU, and highlight some ongoing technical projects in this domain. He will then focus mainly on the economic implications and economic research in this area with a particular emphasis on the role of Personal Information Management Systems (PIMS). He will conclude with some policy recommendation to make personal data portability more effective in the context of the digital economy.
"Should everyone have access to broadband? Universal service in the United Kingdom" by Jason Whalley (Northumbria University)
Should everyone have access to broadband? With the growth of the digital economy, with its widespread socio-economic benefits, strong and persuasive arguments can be made for ensuring that everyone has access to broadband. But in many countries digital divides exist that limit who is able to go online and the benefits that can be achieved. While these digital divides are multi-faceted, if an individual or business is going to be online, they first of all need a connection. With the liberalisation of telecommunications markets, tensions around the provision of broadband in areas unattractive to commercial deployment have been heightened. Some of these areas may be too costly, due to their remoteness or low population densities, while other areas may be perceived as lacking demand.
Within the UK, variations in broadband infrastructure, coupled with its (perceived) slowness when it is available, were reflected in vocal campaigns and political interest. Those who did not have broadband wanted it, while those who had it wanted better quality connections. After much deliberation and posturing by political parties, the response in the UK has been to embark on a regulatory initiative: universal service. In essence, this specifies a basic level of service that anyone regardless of location should have access to. In this talk, the focus is on the evolution of this initiative, highlighting the challenges and tensions faced within the context of a dynamic market. The challenges of specifying an appropriate level of basic service will be illustrated, as will difficulties of determining who will pay for universal service. The talk draws on an ongoing body of work investigating the provision of broadband networks.
"New Paradigms for the Internet" by Robert Frankstone (IEEE CTSoc)
"Communications Policy Regulatory Reform for a Post-PSTN World" by William Lehr (MIT)
We are currently in the midst of a global transformation to a Digital Economy, yet National Regulatory Authorities (NRAs) such as the Federal Communications Commission (FCC) in the U.S. and similar agencies in other countries are still operating under legacy telecommunications policies set in place to manage the Public Switched Telecommunications Network (PSTN). There is general agreement that new frameworks are needed to manage communications policy in the era of IP-based broadband access platforms and the Internet.
In a series of papers over recent years, Dr. Lehr has worked with colleagues to highlight the challenges confronting regulatory reform efforts and worked toward proposals for what a appropriate communications policy for the new Digital Economy might look like. This is very much a work in progress.
"Internet of Things and the economics of operator platforms for smart networks" by Günter Knieps
Online platforms providing intermediation services (e.g. Amazon, eBay) are to be differentiated from operator platforms organizing the new innovative markets for intelligent network services. Of particular relevancy is the differentiation between the physical side of operator platforms as coordinators, aggregators and organizers of physical network services and its complementary virtual side based on real-time, adaptive and location-sensitive (big )data processing and transmission. Disruption of traditional network industries with the evolution towards smart network industries is concomitant with the emergence of innovative operator platforms providing a variety of innovative network services.
Challenging governance problems of contractual relationships among different actors arise. The problem solution competence of operator platforms (two-sided, multi-sided) is the entrepreneurial search for the required governance structures. The problem of division of labor between all-IP broadband network providers, virtual network service providers and platform operators arises concomitant with the implementation of adequate governance structures.
"The economics of infrastructure sharing in 5G networks" by Professor Zoraida Frías (UPM)
Unlike previous mobile technologies, 5G has been designed to enable a general-purpose digital platform that can serve different vertical industries, such as healthcare, energy, or automotive. This idea implies a new sharing paradigm for network resources, deviating from the approach taken so far. Previous generations have served with limited success the connectivity needs of these industries with a simple reason: the requirement on dedicated infrastructure has made extremely difficult building a business case, since the network that would be deployed for each of the verticals would be unoccupied most of the time.
What makes 5G technologically and economically different is the approach towards an increased degree of network resource sharing through two key underlying technologies: Network Functions Virtualization (NFV) and Software Defined Networks (SDN). These technologies will deliver smart, flexible, and scalable networks that can be used – and priced – on demand. In her talk, Zoraida Frías will examine the ramifications of this flexibility to expediting digital transformation through new business models where 5G networks can be provided “as a service”.