Product Life Cycle Theory and the Maturation of the Internet

Abstract:     
Much of the recent debate over Internet policy has focused on the permissibility of business practices that are becoming increasingly common, such as new forms of network management, prioritization, pricing, and strategic partnerships. This Essay analyzes these developments through the lens of the management literature on the product life cycle, dominant designs, technological trajectories and design hierarchies, and the role of complementary assets in determining industry structure. This analysis suggests that many of these business practices may represent nothing more than a reflection of how the nature of competition changes as industries mature. This in turn suggests that network neutrality and other proposals to restrict such practices run the risk of diverting the industry from its natural evolutionary path.

Number of Pages in PDF File: 31

Keywords: Dominant design, technological trajectories, design hierarchies, technological paradigms, Thomas Kuhn, modularity, transaction costs, complementary assets, divided technical leadership, network neutrality, network management, prioritization, strategic partnerships

JEL Classification: D29, K23, L82, L86, L96, L98, O32

Accepted Paper Series