Regulation When Platforms Are Layered

35 Pages Posted: 29 Jul 2019 Last revised: 2 Sep 2019

See all articles by William Lehr

William Lehr

Massachusetts Institute of Technology (MIT) - Computer Science and Artificial Intelligence Laboratory (CSAIL)

David D. Clark

MIT CSAIL

Steven Bauer

Massachusetts Institute of Technology (MIT) - Laboratory for Computer Science (LCS)

KC Claffy

University of California, San Diego (UCSD)

Date Written: July 26, 2019

Abstract

In previous papers, Lehr and Sicker (2018a,b) argued that the changing character of our telecommunications infrastructure called for a new regulatory approach, with a new Communications Act to define the duties and authorities of a reconceptualized FCC (what we call newFCC in this paper).

Today's Internet ecosystem is comprised of multiple digital network platforms organized into a multi-layer architecture. Lower layer IP platforms provided by access and backbone ISPs collectively support the Internet, on which complementors can build higher-layer platforms, such as the platforms provided by powerful firms such as Google, Microsoft, Amazon, Facebook and Apple. These firms control and operate multiple platforms within the larger Internet ecosystem. When dominant platform providers pursue multi-platform strategies in an effort to capture or control a market, such strategies confound current methods for defining markets and assessing market power.

This paper draws on the layered platform nature of the Internet ecosystem, as described in Claffy and Clark (2014), to illustrate how this layered character of today’s Internet ecosystem calls for new regulatory authority. This paper draws on the layered platform model to scope the duties for an agency (or agencies) with sector-specific expertise.

Keywords: Broadband, Internet, Telecommunications, Platforms, Regulation, FCC, Communications Act

JEL Classification: L5, K23, L96, L82, L86

Suggested Citation

Lehr, William and Clark, David D. and Bauer, Steven and Claffy, KC C., Regulation When Platforms Are Layered (July 26, 2019). Available at SSRN: https://ssrn.com/abstract=3427499 or http://dx.doi.org/10.2139/ssrn.3427499

William Lehr (Contact Author)

Massachusetts Institute of Technology (MIT) - Computer Science and Artificial Intelligence Laboratory (CSAIL) ( email )

Stata Center
Cambridge, MA 02142
United States

David D. Clark

MIT CSAIL ( email )

Stata Center
Cambridge, MA 02142
United States
617-253-6003 (Phone)

Steven Bauer

Massachusetts Institute of Technology (MIT) - Laboratory for Computer Science (LCS) ( email )

United States

KC C. Claffy

University of California, San Diego (UCSD) ( email )

9500 Gilman Drive
Mail Code 0502
La Jolla, CA 92093-0112
United States

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