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1、THEECONOMICSANDREGULATIONOFTHEINTERNETMartinCaveDepartmentofEconomicsBrunelUniversityRobinMasonDepartmentofEconomicsUniversityofSouthamptonandCEPR10April2001ApaperpreparedfortheOXREPissueoneconomicsandtheInternet.Theauthors'e−mailaddressesare:martin.cave@brunel.ac.ukandrobin

2、.mason@soton.ac.uk.11.IntroductionTheInternetisahottopic.Thefortunesofdotcomfirmscommandheadlinespaceinnewspapersandtelevisionreports.Governmentshavewell−publicizedpoliciesaboutextendingInternetaccesstocreate"knowledge−basedeconomies".Grandparentskeepintouchwiththeirfamilies

3、bye−mail.YetlittleisknownabouttheInternet.Mostpeoplearehard−pushedtosayexactlywhattheInternetis.RegulatorsandgovernmentsknowthattheInternetisimportant;buttheyarenotquitesurewhetheritrequirestheirattentionornot.Economistshave,onthewhole,notdevotedtoomuchefforttothearea.Thepur

4、poseofthisarticleistoinformthelayperson,regulatorandeconomistabouttheInternet.Sections2and3provideinformationaboutthedevelopmentoftheInternetanditsoperationandorganization.Section4describesthemajorregulationandcompetitionissues.Section5discussestheeconomicanalysisthatisneede

5、dtoinformthepolicydebate.Thearticlereachesseveralconclusions;theyaresummarizedinsection6.Animportantoverallmessageisthatmuchmoreworkisneededinthisareatoansweralloftheoutstandingquestions.TheInternetprovidesafertileresearchareafortheoreticalandappliedresearchers.2.Definitiona

6、ndBackgroundoftheInternetThemostfrequentlyaskedquestionsabouttheInternetis:whatistheInternet?Itissurprisinglyhardtogetapreciseanswer.Theusualdefinition−'aglobalnetworkofnetworks'−issuggestivebuthardlyexact.AmoredetailedansweristhattheInternetisaworldwidenetworkofcomputerstha

7、tusecertainprotocolsfordatatransmissionandexchange.Thedefinitivestatementwasgivenon24October1995,whentheFederalNetworkingCouncil(FNC)unanimouslypassedaresolutiondefiningtheterm.TheFNCdeclaredthattheInternetrefersto"theglobalinformationsystemthat:(i)islogicallylinkedtogetherb

8、yagloballyuniqueaddressspacebasedontheInternetProtocol(IP)oritssubsequentex