In the News

The Federal Communications Commission’s proposed rules for net neutrality would do more to insure economic stability than the proposal from Google and Verizon, according to a new report from New York University think-tank.

As economists who study network neutrality, we have watched the debate over the future of the Internet closely. The new policy proposal from Google and Verizon opens the possibility that some Websites will be treated better than others. This might not be such good news for Internet users.

A report out of New York University’s law school stresses a key – and oft-misunderstood – point: Today’s Internet evolved under net-neutrality rules. The wide-open Web that spurred so much U.S. innovation and growth occurred in a net-neutral environment because it was governed by the same content- and device-neutral rules that governed the nation’s phone networks after the early-‘80s breakup of the old AT&T monopoly.

In August, Verizon and Google agreed on principles to help create a better Internet for the future. But a new paper (.pdf) on net neutrality from New York University Law School’s Institute for Policy Integrity finds a few flaws with the plan. Although much of the paper titled “The Value of Open: An Update on Net Neutrality” is controversial, there is one point in particular that’s quite strong. It assets that ruling proactively on pricing strategies is better than ruling reactively.

When the Clean Air Act was passed, forty years ago this week, climate change was a theory. Since then, the scientific community has reached a consensus about the greenhouse effects of carbon pollution. We are now aware that these gases pose a serious threat to the environment and economy and therefore, must be regulated under the law.

“They are mainly some broad-based recommendations,” said Michael Livermore, executive director of the Institute for Policy Integrity at New York University School of Law. In some areas, such policies may already be in place, he said. “There is probably an aspirational aspect to this, but there is a lot of heterogeneity in countries and within countries in terms of local institutes and so on. It’s heavily dependent on the region,” he said.

When Hurricane Katrina made landfall in southeastern Louisiana on August 29, 2005, it caused extreme flooding up and down the Gulf coastline. Four years later, the Gulf has made a dramatic recovery—thanks in part to the billions of dollars in aid sent via the national flood insurance program. The hurricane certainly underscored the need for federal aid in the event of a natural disaster. But was the federal flood insurance program the best way to get aid to those in need?

Even more concerning is that Mr. Holder has commissioned no study of the benefits of reducing prisoner rape; nor, apparently, does he plan to. Yet as a brief submitted to the Department of Justice by New York University Law School’s Institute for Policy Integrity makes clear, “substantial additional costs” can only be understood in relation to the standards’ projected benefits.

“Heart disease rates will go down, asthma cases will recede and it will literally become easier for New Yorkers to breathe,” said Jason Schwartz, legal fellow at the Institute for Policy Integrity.

An updated analysis released in the spring found that up to 259 lives per year could be saved by using cleaner fuels in the boilers of the 9000 or so large buildings that currently burn dirty oil. The Institute for Policy Integrity report showed that a transition to less toxic fuel options would reduce the number of New Yorkers suffering fatal heart attacks, chronic bronchitis, and asthma—saving billions of dollars in health benefits.