This project will examine the importance of coordination mechanisms for the rate and direction of Internet-based innovation. Two closely related, emerging areas with considerable innovation potential are services and applications utilizing the Internet of Things (IoT) and advanced wireless platforms (including 5G, satellites, and possibly next-generation broadcasting). In contrast to earlier generations of Internet-based innovation, the heterogeneous technological and economic characteristics of these potential services their exploitation most likely will require more differentiated forms of coordination between the relevant players. Only if the synergies between multiple, interdependent players, such as Internet Service Providers (ISPs), device manufacturers, application developers, and users, can be coordinated well, will their full potential be exploited. The multi-year project will inform policies toward advanced ICTs in the United States. The project proposal will be submitted to the National Science Foundation in February 2019 (program submission deadline). 5G wireless services will constitute an integral part of the future gigabit communication network infrastructure. Policymakers worldwide are striving to design legal and regulatory frameworks that best support 5G services. There is wide agreement that a competitive sector organization is superior, but the emerging models differ in the specific roles assigned to policy and regulation. This study explores the implications of alternative policy scenarios for innovation and investment in 5G networks and services. Before the backdrop of the policy discussions in Europe and in the United States, we examine the likely effects of regulatory instruments within a framework of complementary innovation. To assess the joint effect of regulation on the 5G value system, we develop three scenarios (entrepreneurship, regulated competition, policy-push) and discuss the advantages and disadvantages of each.
A key challenge for 5G is the exploration of the tremendous innovation opportunities space. Regulatory interventions affect players in this value system differently so that the overall effects on innovation and investment are contingent on the relative strength of partial effects. Given the importance of innovation and the unique characteristics of the 5G value system, we conclude that the entrepreneurship model with safeguards to protect the competitive process and desirable forms of non-discrimination is the most promising approach. A first report (Bauer & Bohlin 2018) concluded that ex post regulation and competition policy are better aligned with these goals than traditional forms of ex ante regulation or the policy-push scenario emerging in China and South Korea. A proposal to the National Science Foundations (NSF) to explore these issues further is in preparation.