The Challenges Of Standardisation: Towards The Next Generation Internet

Abstract:     
The mass distribution of video programming over IP networks promises a richer experience for viewers, with widely predicted increases in interactivity, choice, personalization, and the ability to micro pay for a la carte programming . Whereas broadcasting was licensed, controlled and regulated tightly by national governments (or even owned as a monopoly service), video-over-IP will be delivered by international market mechanisms with both relatively minimal direct legal restraint and little direct government strategic intervention. Standardizing video delivery to produce network economies of scale and scope will require international corporate coordination between the converging industries of broadcasting and video production, wired and wireless telecommunications, and computer hard- and software derived data communications. In this economic analysis of law, I consider the distribution of existing television broadcasting archive over IP-based networks. While new production can be designed for IP networks in technological, economic and legal terms, I postulate that it is access to the mass of video archive which will create the critical mass of online programming which drives the "video Internet". My focus is on the development of legal regimes based on market mechanisms, which will lead into the online exploitation of broadcast video rights. Though my perspective is predominantly European, the markets are developing globally, and US and Canadian law and corporate strategy is analyzed where appropriate. The overwhelming conclusion is that the Internet's engineering development is driven by the security, competition, quality and reliability imperatives in monetizing broadband data, of which video is the paradigm I adopt. This development is achieved through international standardization by industry bodies supported by governments, and is emerging in creation of quality of service (QoS) in the local loop: the "final mile" to the consumer over which infrastructure and IPR owners exert control. This can only be achieved over broadband networks , which requires investment in upgrading backbone (the "middle mile"), local access and home access infrastructures. Following a summary of the state of video-over-IP legal, policy and market developments required in sections 1-2 , I examine in turn: In Section 3, the current state of broadband market and policy development; In Section 4, TV intellectual property rights (IPRs) in the on-line environment; In Sections 5 & 6, I conclude that rights holders in infrastructure and IPRs will drive the development of a secure broadband local loop for delivery of IP video, signaling at least a temporary end to the Internet's founding architectural principle of "end-to-end". The development of the concept of property rights, together with a consistent and measured examination of the public interest in regulating and assigning those rights, are the primary challenges for both governments and market actors, beyond even the extraordinary pace of technological innovation which is creating the space within which those rights will be exercised. Failing property rights transfer, economies are reduced to barter, in which roughly equally valued goods and services are exchanged without monetization. This paradigm, that without property rights being efficiently assigned, monetization of transfers is inefficient where possible, and replaced by barter, is the situation pertaining to much of the broadband media market. Monetizing this "barter" economy will require rapid evolution from the current IP infrastructure, as well as from the traditional broadcast model.

Number of Pages in PDF File: 31

Keywords: internet, television, regulation, law and economics, cyberlaw, standards, broadcast

JEL Classification: K00, K21, L40, L51, L38, F00

working papers series