When Best Effort is Not Good Enough: Incomplete Contracting, Risk Allocation, and Demand for Consumer Protection in the Market for Broadband Access Services

Reza Rajabiun, Carmen Scurato
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Abstract

Starting from a luxury available to small networks of relatively high-income users, high-speed access to the open Internet has become a necessity for social and economic participation of individuals, competitiveness of business, and economic development. In the transition of broadband from a luxury to a necessity over the past two decades, “best effort” retail contracts (i.e. up to xMbps, subject to varying network conditions) have provided Internet service providers (ISPs) with significant flexibility in managing scarce capacity in response to growing consumer demand for network resources. Over time however, the emergence of a wide variety of advanced Internet applications that require reliable high-speed connectivity (i.e. minimum effective bandwidth/speed, Quality of Service (QoS) guarantees) has stimulated the development of a wide range of network management technologies that enable the delivery of quality of service guarantees and fine-grained service quality and price differentiation (e.g. across applications, senders, users). The combination of these factors has led to the development of a multi-tiered Internet in which scarce capacity is bifurcated into a basic best effort access path to the open Internet and a luxury class of prioritized/sponsored services on the same physical infrastructure. From an economic perspective, mitigating negative externalities from growth in the “fast lane” on best effort “slow lanes” in this differentiated broadband ecosystem have emerged as a seemingly intractable challenge in countries that are further behind in the transition from legacy copper to next generation fiber/4G broadband technologies. Previous research analyzes the emergence of a two-tiered Internet and draws policy inferences primarily in terms of the existence of market power by monopolistic/duopolistic infrastructure providers, inefficient discrimination by this class of gatekeepers to the open Internet, and/or innovation on the edges of the system. There has been little attention paid to the challenges best effort retail contracts that allocate the risk of capacity under-provisioning pose to buyers in a market where more and more applications require minimum service reliability standards. Voices of consumers are therefore almost always supressed in research and policy debates about the optimal design of institutions for ensuring universal access to the open Internet. This article tries to fill this gap by documenting barriers to accessing the open Internet faced by consumers. The first part of the paper provides an overview of the literature on the implications of imperfect contracting for the efficient operation of market systems and as a driver for consumer protection regulation. Then we use quantitative content analysis/natural language processing (NLP) techniques to analyze over 20,000 consumer complaints and carrier responses submitted to the U.S. Federal Communications Commission (FCC) between 2015 and 2017 obtained through the Freedom of Information Act (FOIA) requests to map the interplay between buyers and sellers in a market for Internet connectivity. We conclude with an analysis of public and private legal mechanisms that may help counteract negative externalities from the rise of a two-tiered Internet on quality and affordability of access to the open Internet.
当最大的努力还不够好:不完全合同,风险分配,以及在宽带接入服务市场对消费者保护的需求
从相对高收入用户的小型网络的奢侈品开始,高速接入开放的互联网已经成为个人社会和经济参与、商业竞争力和经济发展的必需品。在过去二十年中,宽带从奢侈品转变为必需品,“尽力而为”的零售合同(即,根据不同的网络条件,最高可达xMbps)为互联网服务提供商(isp)在管理稀缺容量方面提供了极大的灵活性,以应对日益增长的消费者对网络资源的需求。然而,随着时间的推移,各种需要可靠的高速连接(即最低有效带宽/速度、服务质量(QoS)保证)的先进互联网应用的出现,刺激了各种网络管理技术的发展,这些技术能够提供服务质量保证和细粒度的服务质量和价格差异(例如,跨应用程序、发送者、用户)。这些因素的结合导致了多层次互联网的发展,在这种发展中,稀缺的容量被分为通往开放互联网的基本最佳努力访问路径和在同一物理基础设施上的优先/赞助服务的奢侈类别。从经济角度来看,在这种差异化的宽带生态系统中,减轻“快车道”增长带来的负面外部性已经成为一个看似棘手的挑战,因为在从传统铜缆向下一代光纤/4G宽带技术过渡的过程中,这些国家进一步落后。先前的研究分析了双层互联网的出现,并主要根据垄断/双垄断基础设施提供商的市场力量的存在、这类看门人对开放互联网的低效歧视和/或系统边缘的创新来得出政策推论。在一个越来越多的应用程序要求最低服务可靠性标准的市场中,“尽力而为”零售合同给买家带来了分配容量不足风险的挑战,但很少有人注意到这一点。因此,在有关确保普遍接入开放互联网的制度的最佳设计的研究和政策辩论中,消费者的声音几乎总是受到压制。本文试图通过记录消费者访问开放Internet所面临的障碍来填补这一空白。本文的第一部分概述了关于不完善契约对市场体系有效运行的影响以及作为消费者保护法规驱动因素的文献。然后,我们使用定量内容分析/自然语言处理(NLP)技术分析了2015年至2017年间提交给美国联邦通信委员会(FCC)的2万多份消费者投诉和运营商回应,这些投诉和回应是通过《信息自由法》(FOIA)的要求获得的,以映射互联网连接市场中买家和卖家之间的相互作用。最后,我们分析了公共和私人法律机制,这些机制可能有助于抵消双层互联网对开放互联网访问质量和可负担性的负面外部性。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
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