Network Neutrality (not simply a question of competition policy)

This remains a hot topic, as it should in my opinion. My published (and soon to be published) scholarship explains my views on the debate in considerable detail, and I will not attempt to summarize here. Still, after reading much of the commentary on the topic, I feel compelled to make one point clear: The problem with allowing carriers to discriminate is not simply a question of competition policy. It is not simply about whether or not carriers will block content or applications that compete with their own. Yes, these are important concerns that should be aired. But even if there is no evidence of anticompetitive behavior, and even if we believed carriers’ pledges not to misbehave, there are still very good reasons to question whether network owners should be allowed to discriminate. Common nondiscriminatory access to the Internet infrastructure facilitates widespread end-user participation in a variety of socially valuable productive activities. Participation in such activities results in external benefits that accrue to society as a whole (online and offline) and are not captured or necessarily even appreciated by the participants. Shifting to a system where access to and use of the Internet are allocated and prioritized according to users’ willingness and ability to pay —which is the basic objective of network discrimination—preferences certain end-user activities (i.e., those that generate observable and appropriable benefits) over others (i.e., those that generate spillovers). The problem, then, is that potential spillovers may remain unrealized if they cannot be easily observed, valued, and appropriated by those that produce them, even though society as a whole may be better off if those spillovers were actually produced. The basic demand-side point, which I develop elsewhere in detail, is that users are not necessarily optimal buyers of access; unlike a reduction in supply associated with the monopoly deadweight loss problem, the problem here is that demand is reduced, in the sense that the demand manifested by productive users falls short of social demand.