Barbara van Schewick asks at a Berkman lunch whether we need network neutrality rules that prevent carriers from preferring or excluding particular applications or content. She is today going to present the theoretical case for network neutrality rules. (Here is her paper.)

Network providers say that they don’t want to discriminate against applications, so “network neutrality rules are just regulation in search of a problem.” She says there are three questions you need to ask to make the case: 1. Is there a threat of discrimination? 2. If there is, what’s the impact? 3. What’s the impact of regulation on social welfare? She is going to argue that there’s a real threat, it’s more common than often recognized, and the cost in reduced innovation is significant. Fostering competition is not the solution. “Network neutrality rules are the only possible and sensible remedy” to this problem, she will argue.

The potential impact, she says, is on independent application development. That’s important because (she says) the Internet is a “general-purpose technology” and thus has the potential to be used in many places in the economy. Without apps, the Internet has little value precisely because it’s so generic. So, app development “is key to the promise of the economic growth.”

She concludes that there are real costs to introducing network neutrality regulation, but the benefits outweigh them. She says there are still important questions — e.g., what should the rules look like, what are the exceptions, etc. — but “the case for network neutrality is made.”

Q: (David Isenberg) Don’t we really need structural separation (the separation of the wires from the content – e.g., SBC would be forbidden from offering any content or apps), not just network neutrality? Neutrality was the compromise to avoid structural separation, but we’ve seen over the past decade that the carriers will do everything they can to avoid neutrality because they have the opportunity to make billions and billions of dollars at the expense of the country and economy. Just saying “network neutrality” is the wrong thing from a pragmatic and political point of view. [Much discussion ensues.]

Categories: Uncategorized dw