Net Neutrality – Economics and other things Ken Engelhart Roger Ware

Origins of the internet and the different dimensions of net neutrality economic, political – innovation, geeky Definition: Net neutrality: The principle that all data traveling through information networks to consumers should be treated equally. Practices that violate the principle include throttling of data to collect payment, discrimination among users or types of data, or paid promotion to ensure faster delivery.

A more radicalized approach (from savetheinternet.com - an activist website) What is Net Neutrality? Net Neutrality is the internet’s guiding principle: It preserves our right to communicate freely online. Net Neutrality means an internet that enables and protects free speech. It means that ISPs should provide us with open networks — and shouldn’t block or discriminate against any applications or content that ride over those networks. Just as your phone company shouldn’t decide who you call and what you say on that call, your ISP shouldn’t interfere with the content you view or post online. Without Net Neutrality, cable and phone companies could carve the internet into fast and slow lanes. An ISP could slow down its competitors’ content or block political opinions it disagreed with. ISPs could charge extra fees to the few content companies that could afford to pay for preferential treatment — relegating everyone else to a slower tier of service. This would destroy the open internet.

The vertical structure of the internet and where net neutrality enters

Commercial broadband started in 1995 and the term net neutrality was coined in 2003 The concern is that ISPs will charge websites for access to their networks and networks that do not pay will be slowed down or blocked – this has never happened. The ISPs have admitted that they want to do it.

Why it will never happen: - ISPs are already very profitable The important websites would never pay. The ISPs that didn’t block would get all the business How do you have a slow lane when the customer buys an average speed?

weird things have happened but no ISP has ever charged a website  Madison River - TELUS union - AT&T Facetime - Netflix peering points

If the regulations don’t matter, why not have them just to be safe?  zero rating  Facebook Free Basics

Canada has the strictest net neutrality rules in the world and the US will soon have only guidelines.  How will the Internet be different in Canada and the US?

Two sided markets and Net Neutrality Content providers pay a “negative price” (or zero price) for access to customers. Two possible departures from zero price (net neutrality).A fee to all application and content providers. A differential fee structure to content providers, e.g. “fast access” and “slow access”. Brief summary of what a two sided market is and examples How prices are set and whether there is a role for regulator

Other dimensions Net neutrality and investment incentives. Allowing ISPs to discriminate over content users leads to greater investment in bandwidth. Canadian context, CRTC 2017 decision on “zero rating”. Political economy and rent seeking.

Questions?