A Service-Based Model for the Internet Value Chain

The exponential growth of Internet traffic is generating revenues which are not fairly distributed among all the actors involved in the value chain. In spite of the increasing returns for over-the-top service providers, application developers, and device producers, network operators and content right owners are not taking advantage of Internet evolution. Analysts forecast that in a few years this imbalance will cause the congestion of the network without any motivation for new investments on it, thus ultimately bringing the Internet to collapse. On the other hand, if properly distributed, the value generated by Internet traffic would be sufficient to sustain innovation and growth. This paper analyses the bottlenecks in the value chain induced by the access-based business models currently adopted by operators. Net neutrality and market law are the pillars which sustain an alternative service-based model granting to the network the degrees of freedom necessary to overcome its own bottlenecks without the need for external enforcement.