Innovation without permission vs. permission to innovate

It is well known that President Obama is a firm believer in the crucial role that innovation can play in improving U.S. competitiveness and the quality of life of U.S. citizens. ...

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Lourdes Tejedor / @madrid2day

Carlos Alberto Rodriguez Cocina

Director, Head of the Brussels Office of Telefónica  

It is well known that President Obama is a firm believer in the crucial role that innovation can play in improving U.S. competitiveness and the quality of life of U.S. citizens.  From his statement on Technology and Innovation while still a candidate for  President, to the Strategy for American Innovation laid out by the Executive Office in September 2009, to his recent State of the Union speech, President Obama has been consistent with his message about the benefits of innovation as a driver for sustainable growth and job creation.

At the base of its innovation strategy pyramid, the Obama Administration places Information Technology as one of the fundamental building blocks.  Expanding access to broadband is a critical component of this vision guided by the understanding that broadband is the “infrastructure challenge of the 21st century” a view later echoed in the FCC’s National Broadband Plan.  Broadband is perceived as a transformative general purpose technology critical for U.S. competitiveness directly impacting job creation and  enabling innovation in areas such as health, education, government or civic participation.

Together with broadband access, net neutrality to preserve the freedom and openness of Internet access is the other core element of this vision of Information Technology as a platform for innovation. The main rationale behind it (reflected in the recently approved FCC Open Internet Order) is the firm belief that by preserving the free and open nature of the Internet a new virtuous cycle of innovation and investment will be unleashed.  Edge innovators –the entrepreneurs creating Internet content, services and applications (the famous “two guys in a garage” – why they have to be precisely two and in a garage has never been addressed) will lead this process, catalyzing consumer demand for broadband and fostering investment in faster broadband networks that will “spark ever cooler innovation at the edge”[1].

The problem with this vision is the creation of two tiers of innovators in the Internet ecosystem.  Edge providers, whose capacity to innovate without permission should be preserved and network operators whose capacity to innovate at the core should be constrained on account of their “gate-keeper” incentives to favour their own content and services or discriminate among network agents.  Importantly, this dichotomy is justified on a perceived (and contested) lack of competition among broadband service providers in the U.S. market.

One might notice however that stimulating innovation through preservation seems like a contradictio in terminis.  The oxymoron has caught the attention of researchers and scholars such as Richard Bennett who question this preservationist view of the Internet. In fact Bennett recognizes the Internet as a platform poised for change, where network operators and engineers should be “encouraged to experiment with new models, services and technologies to better meet social needs and expectations in the present and in the future”[2].  Christopher Yoo also points to this contradiction in his paper on “The Challenge of New Patterns in Internet Usage”[3].

By conferring the ability to innovate to only one set of actors in the Internet ecosystem (edge providers), the risk of creating winners and losers in the race to develop innovative products and services seems too high.  The Internet ecosystem could be hampered if some actors can innovate without permission while others need permission to innovate. Do you think that this would be the best option for final users and also for the future well being of Internet?

[1] Statement of Chairman Julius Genachowski, Preserving the Open Internet, GN Docket No. 09-191, Broadband Industry Practices, WC Docket No. 07-52.

[2] Richard Bennet, “Designed for Change: End-to-End Arguments, Internet Innovation, and the Net Neutrality Debate”, Information Technology and Innovation Foundation, September 2009.

[3] Christopher Yoo, “The Challenge of New Patterns in Internet Usage”, Time Warner Cable Research  Program on Digital Communications, Fall 2010.


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