Network Neutrality Is Not About Price

by on July 30, 2008 · 33 comments

The Journal has an editorial today on Kevin Martin’s crusade against Comcast that generally reaches the right conclusions—network neutrality regulations aren’t necessary, and even if they were the FCC doesn’t have the authority to impose them unilaterally. But in the process, they repeat a line that is repeated fairly often by free-marketeers, but is nevertheless seriously confused:

Net neutrality proponents want all Internet traffic treated “equally.” They would prohibit Internet service providers from using price to address the ever-growing popularity of streaming video and other bandwidth-intensive programs that cause bottlenecks.

I don’t know of any plausible interpretation of any network neutrality proposal that would preclude ISPs from using price to address bandwidth scarcity. To the contrast, as Adam noted earlier today, network neutrality advocates like Tim Wu are quite clear that metering, bandwidth caps, and charging different rates for different connection speeds would be legal under leading network neutrality proposals.

In fact, this passage gets things almost precisely backwards. What network neutrality proposals are designed to do, rather, is to prevent ISPs from dealing with congestion using non-price, content-based routing policies. Snowe-Dorgan, for example, would have required that ISPs “Not impose a charge on the basis of the type of content, applications, or services made available via the Internet into the network of such broadband service provider.” “Quantity of bandwidth consumed” is not on that list.

This is part of the broader problem of opponents of network neutrality regulation becoming knee-jerk critics of network neutrality as such. The arguments against network neutrality as a technical principle aren’t especially strong, and they’re especially likely to be confused when they’re made by people who know very little about how the Internet works. As I’ll argue in my forthcoming Cato Policy Analysis, the best reasons to oppose network neutrality regulation isn’t because network neutrality is a bad idea (it isn’t), but because network neutrality opponents (1) overestimate the fragility of network neutrality and (2) underestimate the unintended consequences that are likely to flow from new regulations.

As an aside, it’s kind of ironic that so many network neutrality critics have found themselves in the position of critiquing the structure of an industry—long-haul Internet access—that was forged by more than a decade of brutal market competition. The Internet’s current “neutral” architecture and the web of contractual relationships that binds it together has endured for a quarter-century precisely because it’s phenomenally efficient. Google and Yahoo don’t pay Verizon and AT&T for “last mile” bandwidth because those kinds of payments would greatly increase the Internet’s billing overhead with no real benefit. Ordinarily, when the marketplace produces an outcome, free marketeers are inclined to leave well enough alone. But in their zeal to stop network neutrality regulation, a lot of free marketeers have become amateur network architects, insisting that unless AT&T can charge YouTube extra money for video downloads (or whatever), the Internet will grind to a halt. There are some real network engineers who make arguments of this sort, and they should be taken seriously, but when it’s made by people whose expertise is in the social sciences, it just makes them look silly.

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