Table of Contents

Handbook on the Economics of the Internet

Handbook on the Economics of the Internet

Edited by Johannes M. Bauer and Michael Latzer

As the single most important general purpose technology of recent times, the Internet is transforming the organization, competitive structure and business models of the private, the public and non-profit sectors. In 27 original chapters, leading authors discuss theoretical and applied frameworks for the study of the economics of the Internet and its unique economics as a global information and communications infrastructure. They also examine the effects of the Internet on economic transactions (including social production, advertising, innovation, and intellectual property rights), the economics and management of Internet-based industries (including search, news, entertainment, culture, and virtual worlds), and the effects of the Internet on the economy at large.

Chapter 26: The evolution of the Internet: a socioeconomic account

D. Linda Garcia

Subjects: economics and finance, industrial economics, innovation and technology, technology and ict


The US Internet emerged more or less sui generis amidst the technological advances that sparked a revolution in the field of communications. In contrast to the old conception of the communication infrastructure as a regulated natural monopoly, these rapid advances allowed for its unbundling and modularization, thereby giving rise to a radically new paradigm, one that called for deregulation and greater market competition. And just as in the case of the Internet itself, each new phase of its development, and the policy puzzles each posed, arose de novo. As a result, although the technological architecture of the Internet has remained much the same in terms of its modularity, openness, and generativity, each phase of the Internet’s evolution can be differentiated based on aspects such as its political economy, the economic motivations and incentives fostering its development, and the socioeconomic organization of the Internet space. This chapter frames four historical periods (AT & T’s rise and fall, ARPANET and the emergence of TCP/IP, NSFNET, and the Internet as a marketplace) in the context of organizational fields. This contrast of contexts challenges general theories by identifying features associated with each case, and by examining how these features differentially impact socio-economic processes.

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