Nicholas Economides Says, “Don’t Gut Net Neutrality”

By TAP Staff Blogger

Posted on January 18, 2017


“… President-elect Donald Trump’s appointment of Jeff Eisenach and Mark Jamison to the Federal Communications Commission’s transition team sends a clear message: Net neutrality is in grave danger.”


In “Don’t Gut Net Neutrality. It’s Good for People and Business,” Professor Nicholas Economides explains why these FCC appointments cause alarm.


Eisenach consulted for Verizon, and Jamison worked for Sprint. These companies, together with AT&T and cable TV providers, are fierce enemies of network neutrality, since the system limits their ability to exercise market power and exploit content providers and consumers. Without net neutrality rules, prioritization of internet traffic by telecom and cable companies would skew the competition for content, as well as tilt the scales in the dissemination of all political and social views in favor of websites and companies that are able to pay internet access providers.


Below are additional excerpts from “Don’t Gut Net Neutrality. It’s Good for People and Business.”


The Internet Without Net Neutrality Rules


Following a liberalization of regulations by the FCC, in 2005 AT&T and other telecom and cable companies proposed to impose tolls on information flows and to prioritize the flow of information based on whether a website paid the toll. So, for example, if the Wall Street Journal paid AT&T but the New York Times did not, the Journal information would reach web users faster, creating an uneven playing field in news. Similarly, if Yahoo paid AT&T but Google did not, Yahoo’s search results would show up first, tilting the field of competition among search providers.


By employing a system of prioritization, telecom and cable companies would define the terms of competition in internet search, in news, and in the myriad of markets that we reach through the internet. What’s more, telecom and cable companies sell video and telecom services through their traditional networks that are in direct competition with such services delivered through the internet. Imposing prioritization could easily tilt competition in favor of cable and telecom companies, to the detriment of many millions of consumers.


The Internet with the Net Neutrality Rules Established


Fortunately for American business and consumers, in 2015, after a long regulatory battle, the FCC passed rules that codified network neutrality. The rules require that telecom and cable companies treat all information flows equally and do not collect fees to prioritize any application or content. But after Trump’s election, net neutrality’s opponents, traditional entrenched telecom and cable monopoly interests with strong lobbying arms, are once again lobbying to abolish network neutrality.


Benefits of Net Neutrality


Network neutrality is crucial for growth of both new and established companies; virtually all sales, from the largest company to the smallest new business, now rely on the internet. Eliminating unfettered access to internet content and services would hamper these businesses’ ability to grow and would negatively impact economic growth nationwide. President-elect Trump needs to look more carefully at the importance of network neutrality.


This is not a run-of-the-mill regulation tying the hands of business, as the anti-net neutrality lobbyists say. On the contrary, net neutrality is pro-business in the best and fullest sense of the term, guaranteeing that new companies can grow unimpeded and help accelerate the US economy. Net neutrality preserves undistorted consumers’ freedom of choice. And at the same time, net neutrality facilitates a level playing field for political and social interaction on the internet, enhancing freedom.


Read the entire opinion piece in Wired: “Don’t Gut Net Neutrality. It’s Good for People and Business.”


Nicholas Economides is Professor of Economics at the Stern School of Business of New York University, and Executive Director of the Networks, Electronic Commerce and Telecommunications (NET) Institute. He is an internationally recognized academic authority on network economics, electronic commerce and public policy. His fields of specialization and research include the economics of networks, especially of telecommunications, computers, and information.