Neelie KROES
Vice-President of the European Commission

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  • Michael Elling's picture
    Metcalfe's law and the network effect (and practically every competitive market driven supply/demand clearing example over the past 30 years) have clearly demonstrated that the core trumps the edge. That said the core and edge are symbiotic, as are the upper and lower layers. Policy makers, academics, trade and investors need to recognize that vertically integrated service providers do and cannot scale every layer and boundary point across artificially constrained demand. They ultimately fail without a government granted monopoly. Horizontal networks/exchanges in the lower, middle and upper layers are the future and the lesson we've been learning these past 30 years since we've marginally introduced competition. The simplest, best, most economic and most generative model is open access in layer 1 for every service provider granted a public ROW or license with the quid pro quo that every user has a right to access, which cannot be prevented within economic and aesthetic reason by local governments and landlords. At the same time, govt should foster (not regulate) balanced settlement systems. The tradeoff between the two can be considered the "grand compromise" between the access providers and the content providers. The result is to watch an explosion of core-driven synchronous HD VPN's that drive edge access. Governments should still have a role of analysis and oversite to prevent any long-term sustained monopoly at any layer or boundary point that might arise. But the latter is unlikely in a relatively open, competitive market.
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