ACADEMIC ARTICLE SUMMARY
"Net Neutrality," Non-Discrimination and Digital Distribution Through the Internet
Article Source: NET Institute Working Paper #07-03, 2007; New York University Law and Economics Working Papers No. 97
Publication Date:
Time to Read: 1 minute readWritten By:
Nicholas EconomidesTAP Scholar
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ARTICLE SUMMARY
Summary:
This paper asks how letting broadband carriers charge some users more could hurt consumers.
POLICY RELEVANCE
Policy Relevance:
Broadband networks are important to the growth of the United States economy, and non-discrimination rules ("net neutrality") have been a key factor in the Internet's growth.
KEY TAKEAWAYS
Key Takeaways:
- The majority of consumers have a choice of only one or two broadband providers.
- Until 2005, broadband access providers could not charge applications and content providers “on the other side” of the network (a “non-discrimination” rule). Antitrust suits are too slow to work as a substitute remedy.
- Google, Ebay, and Amazon.com developed valuable services at the edges of the network without the fear that carriers could demand a big cut of their revenues once they succeeded.
- The author warns that allowing carriers to charge more for premium service could:
- Give carriers a reason to degrade their service to force a switch to "premium."
- Allow carriers to eliminate competitors who rely on the Internet, such as VoIP providers.
- Raise prices to consumers.
- Discourage the growth of broadband networks.
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About Nicholas Economides
Nicholas Economides is Professor of Economics at the Stern School of Business of New York University. He is also Executive Director of the NET Institute, a worldwide focal point for research on the economics of network and high technology industries. Professor Economides is an internationally recognized academic authority on network economics, electronic commerce and public policy.
