In the News

Michael Livermore talks to the hosts of KGO’s Noon News about the FCC’s decision on net neutrality

It’s now official. At 1:05 pm Eastern Time today the Federal Communications Commission voted 3-2 to enact a controversial set of proposed rules on network neutrality, effectively getting the government into the business of regulating the Internet in ways it hasn’t done before. Congressional Republicans are already planning on holding hearings next year.

The New York University School of Law’s Institute for Policy Integrity [PDF]has also expressed disappointment, calling the new rules “tepid,” and has focused on one specific aspect of the decision: managed services. What in the nine hecks are “managed services”?

The American Civil Liberties Union (ACLU) said that “the FCC has failed to protect free speech and Internet openness for all users,” by not applying the same rules to wireless. At the New York University School of Law, the Institute for Policy Integrity called it “a batch of tepid new rules.”

The United States Court of Appeals for the District of Columbia Circuit ruled in April that the FCC did not have legal authority to stop Comcast, the nation’s largest cable provider, from blocking its customers’ access to a file-sharing service called BitTorrent. The decision limited the FCC’s power over web traffic under the current law and gave the ability for Internet service companies to block or slow specific sites. For example, they could decide to charge video sites like YouTube to deliver their content faster to users. “That’s the worst case scenario,” said Scott Holladay, an economics fellow at the Institute for Policy Integrity at New York University. “The likelihood of that happening is very small.”

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.

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.