Network Neutrality, Consumers, and Innovation

Networks, the Internet, and Cloud Computing, Networks and Infrastructure and Net Neutrality

Article Snapshot


Christopher Yoo


University of Chicago Legal Forum, Vol. 25, p. 179, 2008


This article assesses how network neutrality rules for broadband networks would affect consumers.

Policy Relevance

In some cases, regulators might need to step in to help consumers, but there is little evidence that broad net neutrality rules are needed. Such rules would likely harm consumers.

Main Points

  • Net neutrality rules would bar the owners of broadband network from charging some users more or treating some content different than others.

  • Network owners must grapple with complex congestion and traffic management problems as new technologies arise.
    • A one-size-fits all rule would not work. New rules must accommodate continuous, rapid change.
    • Alternative solutions like more bandwidth or peak load pricing will not always work. Networks need flexibility.

  • Stopping networks from charging different prices to some users or some content might harm ordinary consumers, depending on the context.
    • Consumers can use their willingness to pay more for some services to signal their need for that service.

  • Rules that require all content to be treated the same could discourage the development of innovative software or other products experimenting with different network structures. Services that need better quality service might never develop.

  • Many empirical studies show that network regulation has reduced investment in networks, while there are few examples of problems with today’s less-regulated networks.

  • Many economic arguments show that problems with competition can or might arise due to network effects or vertical integration, but fail to shed light on the question of whether those problems are likely to arise in practice. Without empirical support, these arguments are a poor basis for across-the-board regulation.

  • Because it is not clear whether many of the practices that would be restricted by net neutrality rules would help or harm consumers, the best rules will ensure that network owners can experiment with different type of service and prices, allowing diversity.

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