The Economics of Net Neutrality

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

Article Snapshot


Robert W. Hahn and Scott Wallsten


AEI Brookings Related Publication 06-13, April 2006


This paper looks at proposals to stop broadband carriers from charging some customers more.

Policy Relevance

Net neutrality is a kind of price regulation, and historically such rules have harmed investment and growth.

Main Points

  • Observers disagree about what net neutrality means, but most proposals would:
    • Bar broadband providers from controlling content.
    • Bar broadband providers from charging more for a premium service.

  • Net neutrality supporters argue that traditional Internet flat rate pricing catalyzed growth, but some other kind of pricing might have been even better.

  • Consumers want premium service; it should not be illegal for a hospital to buy better service to enable real-time online collaboration between surgeons.

  • To avoid broadband abuses, government barriers to broadband competition should be removed.

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