Friday, March 30, 2007

Competition and Net Neutrality

Posted by D. Daniel Sokol

One critical area of competition policy is that of competition advocacy regarding legislation and regulation.  While we typically think of competition advocacy as an antitrust agency function, non-government stakeholders can also play an important role in highlighting the competitive effects of legislation and regulation.  One of the hot button issues in the antitrust and technology interface is that of net neutrality.  A number of highly regarding economists recently posted their statement on net neutrality at the  AEI Brooking Joint Center on Regulation.

Economists' Statement on Network Neutrality Policy

William J. Baumol, Martin Cave, Peter Cramton, Robert W. Hahn, Thomas W. Hazlett, Paul L. Joskow, Alfred E. Kahn, Robert E. Litan, John Mayo, Patrick A. Messerlin, Bruce M. Owen, Robert S. Pindyck, Vernon L. Smith, Scott Wallsten, Leonard Waverman, Lawrence J. White.

Network neutrality is a policy proposal that would regulate how network providers manage and price the use of their networks. Congress has introduced several bills on network neutrality. Proposed legislation generally would mandate that Internet service providers exercise no control over the content that flows over their lines and would bar providers from charging particular services more than others for preferentially faster access to the Internet. These proposals must be considered carefully in light of the underlying economics. Our basic concern is that most proposals aimed at implementing net neutrality are likely to do more harm than good.

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