Opinion
Why We Need Network Neutrality on the Internet
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The Internet’s success and its facilitation of enormous innovation has been based on its openness, ubiquity and non-discrimination.
By Nicholas Economides
Network neutrality rules on the Internet are a hotly contested issue. In network neutrality, the present regime on the Internet, Internet Service Providers (ISP) do not collect money from applications and content providers (such as Google and Netflix) to prioritize the arrival of their content to users. AT&T, Verizon, Comcast and other ISPs would like to deviate from net neutrality and charge content providers for prioritization. The FCC passed rules in 2010, but they were thrown out by the DC Court of Appeals. The FCC is presently drafting new rules. President Obama recently came down forcefully on the side of strict net neutrality. The FCC received almost 4 million letters and emails on the issue, with the vast majority supporting net neutrality.
The Internet’s success and its facilitation of enormous innovation has been based on its openness, ubiquity and non-discrimination. Net neutrality means that content from anyone and of any type is treated equally. ISPs want to become gatekeepers of Internet traffic to increase their profits by choosing winners in search, video downloads and every industry that carries content on the Internet. In a truly competitive market, such discrimination would be eliminated by competition. But competition is limited in local Internet provision, and entry of new companies is very hard. So, the only solution to preserve and enhance innovation is the enactment of strict network neutrality rules.
I have written a number of academic papers on net neutrality (see the full list). The latest, The Economics of Network Neutrality, RAND Journal of Economics, co-authored with Benjamin Hermalin (UC Berkeley), shows that, even when there is network congestion, network neutrality can be the optimal rule for society, taking into account the benefit to users and the ISPs, as well as to the content and applications providers.
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Nicholas Economides is a Professor of Economics.
The Internet’s success and its facilitation of enormous innovation has been based on its openness, ubiquity and non-discrimination. Net neutrality means that content from anyone and of any type is treated equally. ISPs want to become gatekeepers of Internet traffic to increase their profits by choosing winners in search, video downloads and every industry that carries content on the Internet. In a truly competitive market, such discrimination would be eliminated by competition. But competition is limited in local Internet provision, and entry of new companies is very hard. So, the only solution to preserve and enhance innovation is the enactment of strict network neutrality rules.
I have written a number of academic papers on net neutrality (see the full list). The latest, The Economics of Network Neutrality, RAND Journal of Economics, co-authored with Benjamin Hermalin (UC Berkeley), shows that, even when there is network congestion, network neutrality can be the optimal rule for society, taking into account the benefit to users and the ISPs, as well as to the content and applications providers.
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Nicholas Economides is a Professor of Economics.