Three essays on the Internet: Network diffusion characteristics, Content pricing strategies, and new Regulation framework in IoT era

Abstract

Internet has changed the individuals life style and social aspect. And the Internet is the result of innovative activity since its development. This dissertation revisits the Internet on the view on innovation diffusion. The usage and diffusion of the Internet vary greatly by country and by income level. Chapter 2 investigates through empirical analysis the factors that make Internet diffusion faster, and the results show that the various and abundant content has played a crucial role for fast diffusion of the Internet. Another result is that, in the early stage of Internet diffusion, network externality seems to be the most important factor for fast Internet diffusion, but as diffusion progresses to a matured stage, the amount of available content is the crucial factor for fast Internet diffusion. And it can be inferred that the two industries are in an indivisible relationship for the diffusion of Internet. Chapter 3 compares the efficiency of digital contents firms which have different pricing strategies and the result shows that the zero pricing with additional revenue from online advertisement is the most efficient strategy by meta-frontier analysis. On the view of diffusion of innovation, this new business or operational strategy have helped diffusion of Internet or diffusion of innovation. It could be also inferred that this innovative strategy has helped and supported the diffusion of Internet rather than their innovation activity itself. Chapter 4 proposes new regulation framework in the IoT era. IoT service is new and innovative service based on the Internet and recently starts to launch. The new regulation framework, named as Isotropic dynamics regulation framework, is conceptual framework rather than a practical or legal regulation tool. And it considers three points of view. First, data and information should be delivered to targeted destinations precisely and on time, implying that the need for a vertical regulation framework has arisen. Second, appropriate regulations should be imposed on the three layers of the full IoT service, similar to the horizontal regulation framework associated with the traditional Internet era. Finally, innovations should be promoted isotropically in all three layers. The above describes the diffusion of Internet as diffusion of innovation. However, the integration of information will be another main issue as Internet network and its related services and contents, which came from integrated technologies, advance. And two policy directions are inferred: One is that integrated information should be managed very carefully because misused information may harm to users, and the other is that worldwide ICT policy is needed to deploy these integrated information and technologies in the developing countries because reduced transaction cost can spread more dividends of ICT in these countries.