[IP] "COMMON SENSE ABOUT NETWORK NEUTRALITY"
COMMON SENSE ABOUT NETWORK NEUTRALITY
Is the Internet about to implode? Listening to the rhetoric coming
out of Washington, D.C. about “network neutrality,” you would think
so. Various businesses and interest groups forecast the death of the
Internet as we know it, unless their favorite bill gets passed. Lots
of heat, not much light.
Recently, several scholars (signed below) spanning the disciplines of
computer science, economics and law convened by the Wharton School,
University of Pennsylvania and Carnegie-Mellon University, to provide
an unbiased interdisciplinary analysis of network neutrality.
Drawing on their extensive experience in and with government, they
clarify and frame these complex issues and provide a way forward for
Congress and the industry alike. Here’s what they have to say:
________________________________________________________________________
____________
The Internet needs a makeover. Unfortunately, well-intentioned
Congressional initiatives, aimed at preserving the best of the old
Internet, threaten to stifle the emergence of the new one.
The current Internet supports many popular and valuable services.
But experts agree that an updated Internet could offer a wide range
of new and improved services, including better security against
viruses, worms, denial-of-service attacks, and zombie computers;
services that require high levels of reliability, such as medical
monitoring; and services that cannot tolerate network delays, such as
voice and streaming video. To provide these new services, both the
architecture of the Internet and the business models through which
Internet services are delivered may have to change.
Congress is considering several initiatives (known collectively under
the banner of “network neutrality”) aimed at promoting continuing
Internet innovation by restricting network owners’ ability to give
traffic priority based on the content or application being carried or
on the sender’s willingness to pay. The problem is that some of the
practices that network neutrality would prohibit could increase the
value of the Internet for customers.
Traffic management is a prime example. When traffic surges beyond
the ability of the network to carry it, something is going to be
delayed. When choosing what gets delayed, it makes sense to allow a
network to favor traffic from a patient’s heart monitor over traffic
delivering a music download. It also makes sense to allow network
operators to restrict traffic that is downright harmful, such as
viruses, worms, and spam.
Pricing raises similar issues. To date, Internet pricing has been
relatively simple. Based on experience in other similar markets, we
expect that, if left alone, pricing and services models would likely
evolve. For example, new services with guaranteed delivery quality
might emerge to support applications such as medical monitoring,
which require higher levels of reliability than the current Internet
can guarantee. Suppliers can be expected to charge higher prices for
these premium services. Blocking premium pricing in the name of
neutrality may have the unintended effect of blocking the premium
services from which customers would have benefited. No one would
propose that the US Postal Service not be permitted to offer Express
Mail because a “fast lane” mail service is “undemocratic,” yet some
current proposals would do exactly this for Internet services. For
this reason, foreclosing the emergence of alternative pricing regimes
for innovative services would be ill advised.
We are not saying that all discrimination is good. Some forms of
discrimination can be harmful, especially when service providers have
market power. For example, if a network operator were to block
competition in another market in which it offers service, such as
when a local telephone company that is the sole provider of broadband
service to a particular community blocks its subscribers from using
Internet telephony, then public policy should intervene if this
anticompetitive action can reliably be identified and the cure will
not be worse than the disease.
The central policy principle should be to prevent anticompetitive
actions and reduce associated harms without impeding the Internet’s
evolution. Current proposals would affect all broadband providers
regardless of whether they wield monopoly power and without any
analysis of whether the challenged practice actually harms
competition. In the process, they threaten to restrict a wide range
of innovative services without providing compensating customer
benefits. The problem is that it can be difficult, if not
impossible, to determine in advance whether a particular practice
would promote or harm competition. Current antitrust law solves this
problem by blocking practices only when those who oppose them can
demonstrate actual harm to competition. We believe that such a case-
by-case approach that focuses on actual, rather than potential, harm
to competition represents the best way to protect consumers while
giving the Internet the breathing room it needs to move forward.
Blanket regulation, which some network neutrality initiatives
support, is not a good policy choice.
Public policy toward the Internet should evolve to meet our future
needs. To accomplish this, policymakers should frame the issues in
terms of how to make customers better off, rather than focusing on
the impact on particular traffic or particular competitors. This
framing would highlight the potential benefits to customers that
shifting away from the current architecture of the Internet could
yield. It would also ensure that any regulatory intervention would
be tailored to the precise scope of the anticompetitive harm.
David Farber is the Distinguished Career Professor of Computer
Science and Public Policy at the Carnegie Mellon University having
retired as the Alfred Filter Moore Professor of Telecommunication in
the University of Pennsylvania’s School of Engineering. He served as
Chief Technologist of the Federal Communications Commission (FCC)
1999-2000.
Gerald Faulhaber is Professor of Business and Public Policy at the
Wharton School, and Professor of Law, University of Pennsylvania. He
served as Chief Economist of the FCC 2000-01.
Michael L. Katz holds the Sarin Chair in Strategy and Leadership at
the University of California, Berkeley's Haas School of Business, and
is also a Professor in the Berkeley Economics Department. He served
as Deputy Assistant Attorney General for Economic Analysis in the
Antitrust Division of the U.S. Department of Justice 2001-03, and as
Chief Economist of the FCC 1994-96.
Christopher S. Yoo is Professor of Law and Director, Technology &
Entertainment Law Program, at Vanderbilt University. He served on
the staff of the U.S. Senate 1987-89 and clerked for Justice Anthony
M. Kennedy of the Supreme Court of the United States 1997-98.
-------------------------------------
You are subscribed as roessler@xxxxxxxxxxxxxxxxxx
To manage your subscription, go to
http://v2.listbox.com/member/?listname=ip
Archives at: http://www.interesting-people.org/archives/interesting-people/