Project Updates – Net Neutrality

  • Friday
    November 11th,
    2011

    Senate Votes to Retain Net Neutrality Rules

    The Senate rejected a bid to overturn the Federal Communications Commission’s (FCC) net neutrality rules yesterday, ensuring that consumers will continue to garner huge economic benefits from an open Internet.

    The rules, which will come into effect on November 20, 2011, forbid Internet Service Providers from discriminating against content-providers by charging them a fee for access to end-users. Our recent report examined the consumer value created by the Internet — up to $5,686 per user in a year — and discussed the importance of net neutrality for protecting that value. Passage of the bill could have reduced Internet Service Providers’ incentives to invest in Internet infrastructure, threatening consumers and reducing the overall value of the network.

    The Senate’s decision is an important step in protecting economic benefits for consumers, but the FCC rules are still threatened by pending court challenges. The outcomes of these decisions may affect investment in both Internet infrastructure and content for decades to come.

    Issue(s): Net Neutrality  

  • Friday
    November 19th,
    2010

    Memo on Myths of Net Neutrality

    In the discourse over net neutrality there are some important facts getting lost in the shuffle. There are strong arguments that weigh in favor of net neutrality, and there are reasonable arguments that caution against it. There is no reason for either side to rely on myths to win support.

    So in an attempt to refute misconceptions, highlight flawed assumptions that underlie certain myths, or fill in the blanks where available information is too incomplete or ambiguous to support the conclusion being drawn, we drafted a memo for those on both sides of the net neutrality debate who are interested in clarifying some of it’s economic issues.

    A few of the twelve myths busted in the memo are:

    • Myth: ISPs will not do anything to reduce the value of the Internet to their consumers. It would be bad for business.
    • Myth: Net Neutrality protections will cost jobs, or otherwise depress employment.
    • Myth: Network owners require the ability to price-prioritize in order to build faster, more comprehensive Internet service.

    Issue(s): Net Neutrality   Type: Memos

  • Thursday
    November 4th,
    2010

    Comments on specialized services and wireless in the net-neutrality debate

    Recently, the FCC asked for feedback on two issues: how so-called “specialized services” should be exempted from neutrality protections, if at all, and whether open Internet rules should be applied to wireless services in addition to wireline broadband services.

    So today, Policy Integrity submitted reply comments in response to these two questions.

    In terms of the first issue, we look at economic arguments for why broadband service should be given a broad definition, whereas any exemption for a category of “specialized services” should be very narrowly drawn. Otherwise, the specialized service exemption will become a big loophole for applications and services that basically replace content that travels over the neutral network.

    As to the wireless issue, if network neutrality rules are applied to broadband, but not to wireless, ISPs will have incentives to concentrate more of their investment in wireless infrastructure. By contrast, content developers will have incentives to focus more of their efforts on broadband, since their returns will be higher on the open platform. This mismatch of investment incentives could lower the value of both networks for ISPs, content creators, and end-users.

    This is part of our on-going work on net-neutrality including a set of original comments on the proposed regulation.

    Issue(s): Net Neutrality   Type: Public Comments

  • Friday
    September 24th,
    2010

    Response to the European Commission on Net Neutrality

    Today, Policy Integrity submitted comments on net neutrality to the European Commission, Directorate-General for Information Society and Media, (EC) in response to the EC’s “Public Consultation on the Open Internet and Net Neutrality in Europe.”

    Similar to the way United States agencies solicit public input, the EC invited “responses” or comments, as a way to encourage debate and collect information that will feed into a report the EC will present to the European Parliament and Council before the end of the year, recommending reforms to the EU’s current regulatory framework for electronic communications. More specifically, the EC is researching and developing policies to address Internet traffic management, discrimination, and price-prioritization issues. Among the issues being considered is whether ISPs should be allowed to differentiate between content providers and, if so, how that allowance should be restricted in ways that will maximize the value of the Internet and preserve openness.

    Our letter noted our support for the EC’s efforts, and that our economic analysis makes a strong case in favor of well-structured regulations in this area (as opposed to voluntary standards). Such regulations will ensure that the Internet market in Europe stays competitive, and continues generating incentives that encourage innovation from both content providers and carriers.

    Included in our response was a copy of our recent policy brief, The Value of Open, as well as the earlier analysis, Free to Invest.

    Issue(s): Net Neutrality   Type: Public Comments

  • Wednesday
    July 7th,
    2010

    Economists write FCC to rebut statement from 74 Members of Congress

    On May 24th, 2010, 74 Democratic members of the House of Representatives sent a letter to the Federal Communications Commission requesting the halt of net neutrality regulations.

    Today, Policy Integrity’s Scott Holladay along with three other economists, wrote to the FCC in response. They state that the congressional note was “based on a misunderstanding of the current state of the Internet and does not accurately reflect the economic impacts of network neutrality.”

    The most glaring error in the May 24th letter is its failure to recognize that the Internet currently operates under a de facto network neutrality regime. So the question is not whether to impose network neutrality on the Internet but whether to eliminate it.

    The letter overlooks the ways net neutrality corrects market imperfections that skew profits away from content providers. By making it even more difficult for content providers to generate returns on their investment, eliminating net neutrality can have the result of driving content providers and end users off the Internet.

    The letter also fails to recognize “the Internet” includes infrastructure and content. Weakening one to benefit the other is a step that does not benefit consumers; to maximize the value of the Internet to Americans, proper incentives for both broadband and content providers must be protected.

    Issue(s): Net Neutrality   Type: Letters