Tuesday, September 4, 2012

Regulating the Cloud: More, Less or Different Regulation and Competing Agendas

From the abstract: "The policy section specifically considers the economic regulation of cloud services concentrating on cloud platform competition and neutrality. To the extent that computational services are essential complements to many forms of economic activity, fundamental assumptions regarding the identification of markets, the quantification of market power and the appropriate locus of liability (whether regulatory or contractual) may need to be reconsidered. This is, of course, most notable in location-based issues, but applies as well to the linkage or potential conflict among different competition and consumer protection regulation (e.g. IPR in content or in cloud-hosted applications, economically-valuable personal, proprietary or private data quality of service contracts). The paper extends the conventional analysis of two-sided markets (adopting the conventional view of public cloud providers as platforms) to differentiate e.g. situations where value is derived from a specific matching or relationship between individual users and service providers from those where the value of participation for players on one side depends on an aggregate (e.g. distribution or number) of those on the other side, and situations where users and their demands and service providers and their outputs migrate from one platform to another – and where, in consequence, the layered network structure is critical to market structure and performance. This analysis draws out the implications of different deployment strategies, ‘freemium’ and pay-or-play models and predatory or collusive use of the cloud and cloud-based resources." Read more