After reading two different economics papers on net neutrality, I learned to my surprise that there are more than two sides to the network neutrality debate! From these two papers alone I saw three major themes in the debate, one favoring a free market and two involving very different kinds of regulation. The free market argument, led by Christopher Yoo at Vanderbilt, asserted that the currently proposed neutrality regulations would cause more harm than good by limiting the freedom of network providers to innovate, to differentiate themselves, and to absorb the congestion costs of the Internet. In effect this would hinder them from competing with one another and would reduce the incentive for companies to invest in network infrastructure. Furthermore, according to Yoo, price discrimination based on type of service requested would be the optimal strategy to control Internet usage in a way that benefits both providers and consumers.
On the opposite end, neutrality regulation advocates, as exemplified by Lawrence Lessiag at Stanford, have a strong opinion on how the Internet should work in that it should be a "dumb" pipe used to transport data between endpoints. Like other utilities such as highways and electricity, discrimination should not occur based on purpose or type of use, source, or destination, as such discrimination would greatly reduce the overall value of the Internet to society for the benefit only of the network providers. In order to prevent any such future abuses of network infrastructure, the government should intercede now by outlawing this behavior.
Lastly, Douglas Hass argued in 2007 that an analysis of the history of the Internet reveals that control over its direction has always been primarily dictated not by any national or local ISPs but by the purchasing power of users themselves. He gives a few high profile examples of attempts, perceived or real, at violating net neutrality and the backlash responses that have kept the Internet mostly in line. Furthermore because of how rapidly Internet technology has evolved, both at the infrastructure and application level, Hass believes we should not presume at this time to know what is best for the Internet in terms of neutrality. Instead, he advocates regulations that enforce transparency in the Internet services customers purchase, including transparency related to any kind of traffic discrimination a network provider might perform. This will allow users to be informed about their decisions and continue to drive the evolution of the Internet through their purchasing power.
Of all these opinions, I currently favor the last, although I now have a greater appreciation for the complexity of the issue. My biggest issue with the transparency approach is that it will be very difficult to define and enforce the regulations needed to ensure ISPs reveal all that they should about their network policies. However, if such transparency could be enforced, it alone would seriously regulate company behavior relative to neutrality simply based on the fact that their actions will be placed in the open for public scrutiny. Also, in the worst case, such regulation would reveal any glaring violations of net neutrality immediately as they occur, so that if more regulation is eventually needed it can be applied quickly and effectively.
As much as I admire the noble ideas of network neutrality, I also believe that the government already has its hands full regulating our selfish behavior as companies and as citizens. If unverifiable economic theory is the only proof of needed regulation, then perhaps it can wait until stronger proof is brought to light.
Thursday, October 21, 2010
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