Rethinking Broadband Internet Access

Networks, the Internet, and Cloud Computing, Networks and Infrastructure and Broadband

Article Snapshot


Daniel Spulber and Christopher Yoo


Harvard Journal of Law & Technology, Vol. 22, No. 1, Fall 2008


This article assesses how regulation would be likely to affect broadband networks.

Policy Relevance

Proposed broadband rules such as network neutrality are not needed, and will discourage investment in networks and interfere with network operations.

Main Points

  • Early broadband technologies, DSL and cable modem service, now compete with fiber optic FiOS networks and various wireless broadband services.

  • New proposals to regulate broadband take the form of network neutrality rules, a type of “access regulation.” Regulators would control the terms on which network owners would offer access to competitors and other users.

  • Traditional regulation was supported by fears of natural monopoly, that is, economists thought one firm could serve customers more cheaply than many. But broadband networks are not natural monopolies, as technology has changed network costs, and phone, cable, and wireless networks compete.

  • Some argue that regulation is needed because of network effects. If users want to join the same network used by many others, a single firm might gain too much market share, constraining consumer’s choices through “lock-in.” But this is unlikely with broadband, where the market is still growing and firms of equal size compete.

  • Some support regulation to stop large networks from shutting out firms offering related services through “vertical integration.” But broadband networks profit from carrying a lot of traffic to spread costs, and have little reason to shut out other firms.
    • Vertical integration will often help consumers, and antitrust courts must look at the evidence in each case.

  • The last mile of the telephone network closest to the final consumer is the most concentrated, and it makes sense to focus regulatory proposals on this problem, not on the rest of the networks.

  • Many studies recognize that network regulations result in lower network investment.

  • Networks are very complex, and different users can access networks in several different ways. Over time, regulation of all of these access points has proved problematic.

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