Net Neutrality: An Economic and Political Comparative Analyst

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Mckee, Heidi A. "Policy Matters Now and in the Future: Net Neutrality, Corporate Data Mining, and Government Surveillance." Computers and Composition 28.4 (2011): 276-91.
Steffe, Christopher Ross. "Why we need Net Neutrality Legislation now or: How I learned to Stop Worrying and Trust the FCC." Drake Law Review 58 (2010): 1149-183.
Ibid.
Jan Krämer, Lukas Wiewiorra, and Christof Weinhardt. "Net Neutrality: A Progress Report." Telecommunications Policy 37.9 (2013): 794-813.
Steffe, Christopher Ross. "Why we need Net Neutrality Legislation now or: How I learned to Stop Worrying and Trust the FCC." Drake Law Review 58 (2010): 1149-183.
Ibid.
Ibid.
Wu, Tim. "Network Neutrality, Broadband Discrimination." Journal on Telecom and High Tech Law 2 (2003): 141-76.
Ibid.
"Online Extra: At SBC, It's All About "Scale and Scope"" Bloomberg Business Week. Bloomberg, 06 Nov. 2005. Web. 18 Nov. 2014. .
Maria Cristina Leal. "The EU Approach to Net Neutrality: Network Operators and Over-the-top Players, Friends or Foes?" Computer Law & Security Review 30.5 (2014): 506-20.
Ibid.
Ganley, Paul, and Ben Allgrove. "Net Neutrality: A User's Guide." Computer Law & Security Report 22 (2006): 454-63.
Choi, Jay Pil. "Net Neutrality and Investment Incentives." The RAND Journal of Economics 41.3 (2010): 446-71.
White Paper
Christopher Ross Steffe. "WHY WE NEED NET NEUTRALITY LEGISLATION NOW OR: HOW I LEARNED TO STOP WORRYING AND TRUST THE FCC." Drake Law Review 58 (2010): 1149-183.
Pacific Telegraph Act of 1860, ch. 137, § 3, 12 Stat. 41, 42 (1860)
Communications Act of 1934, 416, 73 Cong., Federal Communications Commission (1934) (enacted).
Christopher Ross Steffe. "WHY WE NEED NET NEUTRALITY LEGISLATION NOW OR: HOW I LEARNED TO STOP WORRYING AND TRUST THE FCC." Drake Law Review 58 (2010): 1149-183.

Choi, Jay Pil. "Net Neutrality and Investment Incentives." The RAND Journal of Economics 41.3 (2010): 446-71.
Wu, Tim. The Master Switch: The Rise and Fall of Information Empires. New York: Alfred A. Knopf, 2010.
Ibid.
Ibid
Ibid
Roxberg, Emily R. "FCC Authority Post-Comcast: Finding a Happy Medium in the Net Neutrality Debate." Journal of Corporation Law 37.1 (2011): 223-44.
F.C.C. to Look at Complaints Comcast Interferes with Net, N.Y. TIMES, Jan. 9, 2008, available at, http://www.nytimes.com/2008/01/09/business/media/09fcc. html?_r=1&partner=permalink&exprod=permalink.
Ibid.
Bennett, Dashiell. "Obama: The Internet Is a Utility." The Atlantic. Atlantic Media Company, 10 Nov. 2014. Web. 05 Dec. 2014. .;"Net Neutrality: President Obama's Plan for a Free and Open Internet." The White House. The White House, n.d. Web. 04 Dec. 2014. .
Shin, Dong-Hee. "A Comparative Analysis of Net Neutrality: Insights Gained by Juxtaposing the U.S. and Korea." Telecommunications Policy (2014): 1-17. Science Direct. Web. 4 Oct. 2014. .
Ibid.
Ibid.
Ibid.
Sahel, Jean-Jacques. "Final Act: The Few More Steps Needed to Restore and Protect Net Neutrality in Europe." COMMUNICATIONS & STRATEGIES 84.4 (2011): 15-34.; FRADIN, ANDRÉA. "La Fin De L'Internet Illimité." OWNI La Fin De LInternet Illimit Comments. OWNI.eu, 19 Aug. 2011. Web. 05 Dec. 2014. .
Ibid.
Ibid.
Njoroge, Paul, Asuman Ozdaglar, Nicolás E. Stier-Moses, and Gabriel Y. Weintraub. "Investment in Two-Sided Markets and the Net Neutrality Debate." Review of Network Economics 12.4 (2013): 355-402.
Mckee, Heidi A. "Policy Matters Now and in the Future: Net Neutrality, Corporate Data Mining, and Government Surveillance." Computers and Composition 28.4 (2011): 276-91.
Leal, Maria Cristina. "The EU Approach to Net Neutrality: Network Operators and Over-the-top Players, Friends or Foes?" Computer Law & Security Review 30.5 (2014): 506-20.
Bauer, Johannes M., and Jonathan Adams Obar. "Reconciling Political and Economic Goals in the Net Neutrality Debate." The Information Society 30 (2014): 1-19.
Choi, Jay Pil. "Net Neutrality and Investment Incentives." The RAND Journal of Economics 41.3 (2010): 446-71.
Pouwelse, Johan A., Pawel Garbacki, Dick Epema, and Henk Sips. "Pirates and Samaritans: A Decade of Measurements on Peer Production and Their Implications for Net Neutrality and Copyright." Telecommunications Policy 32.11 (2008): 701-12.
Mckee, Heidi A. "Policy Matters Now and in the Future: Net Neutrality, Corporate Data Mining, and Government Surveillance." Computers and Composition 28.4 (2011): 276-91.
Guo, Hong, Hsing Kenneth Cheng, and Subhajyoti Bandyopadhyay. "Broadband Network Management and the Net Neutrality Debate." Production and Operations Management (2013): N/a.
James Fallows. "Big Fat Pipes: Google's Underappreciated Tech Edge." The Atlantic. Atlantic Media Company, 01 Aug. 2012. Web. 05 Dec. 2014. .; Christopher Mitchell. "Community Broadband Networks." The Economics of the Google Gigabit. Institute for Local Self-Reliance, 30 July 2012. Web. 05 Dec. 2014. .
Sam Gustin. "Google Fiber Issues Public Challenge: Get Up To Speed! " TIME.com." Business Money Google Fiber Issues Public Challenge Get Up To Speed Comments. Time, 14 Sept. 2012. Web. 05 Dec. 2014. .


Net Neutrality: An Economic and Political Comparative Analyst




























POLI 5P21
Dr. Blayne Haggart
David Jennings
November 24, 2014
Major Essay #1 Rough Draft
One of the more obscure topics in global political economy, the debate over net neutrality generally takes a backseat to other major issues such as the decline in the hegemony of the United States, doctrines of economic development, income inequality, and environmental issues. Yet in no way is it any less important for the future of the global political economy. The Net Neutrality debate is over whether or not the internet should remain open access or should internet service providers be able to prioritize bandwidth. This would deviate from some of the founding principles of the internet and has raised a number of political and economic concerns. Therefore it is the objective of this paper to clearly present the debate over net neutrality by showcasing the concerns of the consumer, internet service providers and internet content creators. The issues range from attacks on freedom of speech, competition, innovation, normative behavior and investment. This paper will demonstrate the debate using a number of examples from the United States where the debate originated, Asia, in particular Korea, and Europe. In addition, this study hopes to showcase where these three regions find consensus and differentiate on the debate. Finally, this paper hopes to provide some suggestions with the hopes of moving the debate forward by weighing each side of the debate in order to suggest the best possible solution. This paper takes a position that the internet is currently operating in an equal state; the debate over net neutrality is enormously complex and there is a great deal at stake.
Over the past decade the internet has stood at a crossroads on how internet service providers (ISPs) should best distribute data from internet content providers (ICPs) to internet consumers (ICs). At the core of this debate is a concept of net neutrality and whether or not the internet should continue in its existing form and be governed by the end-to-end principle with the intelligence residing on the edges. "This means that generally for information sent online from one user to another, only two users—the sender and the recipient—know what was actually sent." Net neutrality is the idea that all data is created equal, therefore, the gigabyte data from Google is treated that the same as a gigabyte from another internet startup company. This is been the founding principle of the internet, and the normative set of behavior that has governed the internet's development.
Despite only being around for roughly a few decades in the public sphere, the internet has drastically changed the way in which humanity interacts with one another. From the way societies communicate, exchange information, and consumer media, the internet is taking an ever-increasing role in the daily lives of the global community. Shorthand for internetwork, the internet was designed for connection between computer networks to facilitate rapid transmission of data. During its early stages in the 1960s a few universities had access to the internet, and it was primarily used for the transmission of text messages. Information was fragmented into data packs and through the use of routers it was delivered anonymously to the receiving terminal. This process is governed by the end-to-end principle.
When an e-mail is sent, it does not travel to its destination in one piece. Instead, once the user is ready to send the message, the user's computer divides that message into numerous packets and it is sent via a process called dynamic routing. Dynamic routing simply means there is no preordained path for these packets to take. In attempting to send the data to its intended destination, "each router calculates the best routing for a packet at a particular moment of time, given current traffic patterns, and sends the packet to the next router . . . . [T]wo packets from the same message may not travel the same physical path through the network."
Because the data is sent anonymously the various routers have no control over the priority of each data packet, which prevents the prioritization of data outside of the norm of first in first out. Since the birth of the internet this has been one of its founding principles: that all data should be treated equally and control over data should belong to the peripheries, which are the creators and consumers. It is these principles that make up the spirit of the internet and the primary drivers of the net neutrality debate.
Although Net Neutrality is a relatively new term that was coined by Columbia Law professor Tim Wu in 2003, who is a leader in the academic literature on the topic. Despite the term being around for over to a decade there is no agreed upon definition of net neutrality. For Wu, he viewed the debate over net neutrality as a continuation of common carrier. The idea of common carrier dates back to the early inception of telecommunication technologies. What it does is prohibit phone companies from charging more money in order to prioritize phone service. So all consumers pay the same for the same phone call. However, information transmitted by phone uses roughly the same amount of data. When juxtaposed to information transmitted on the internet different applications have different levels of data usage. For example the transmission of a MS Word document would use less data than the transmission of a picture, and a picture would use less data than streaming a video or downloading a video. On top of that, through developments in image quality there is now the ability to stream in high definition (HD) and it is only a matter of time before ICPs allow for the ability to stream in 4K. The ability to stream in the various quality settings is great for the consumer due to the fact that they are able to receive a superior product; however, this presents certain challenges to ISPs. The debate over net neutrality truly kicked off in 2005 when the chief executive officer of AT&T, Ed Whitacre said the following;
How do you think they're going to get to customers? Through a broadband pipe? Cable companies have them. We have them. Now what they would like to do is use my pipes free, but I ain't going to let them do that because we have spent this capital and we have to have a return on it. So there's going to have to be some mechanism for these people who use these pipes to pay for the portion they're using. Why should they be allowed to use my pipes?

As mentioned before, one of the founding principles of the Internet is that no one should have the ability to inhibit another person's access to data. Since then there is a line to be drawn between content providers such as Netflix and Google, activists, software engineers and any number of individuals who follow politics and the internet closely versus the big cable companies such as Comcast and AT&T.
Although the internet contains a seemingly limitless amount of information for the ICs to read, watch and download, there is only a limited amount of bandwidth to go around. Although the creation of internet content is controlled by the peripheries, bandwidth is controlled by ISPs. This opens up the fundamental debate over net neutrality; should ISPs be allowed to charge for the prioritization of bandwidth? In any given area there is a limited amount of bandwidth, which usually factors into the size of the population. ISPs will routinely oversell the amount of bandwidth to consumers. So if all the consumers were to use the internet at the same time it would create congestion. The idea of overselling bandwidths may seem like a questionable method employed by the ISPs, but when compared to an analogy of the road it makes more sense. If everyone had their own personal road it would be economically infeasible to maintain, therefore it makes sense to share the road with groups of people under the assumption that not everyone will use a road at the same time. However, there are certain periods of the day which see a drastic increase in the use of the road (i.e. rush hour), and due to the increased volume of cars there is congestion on the road and the whole is slowed down. Bandwidth works much the same way a road does. There are certain times a day where there is an increase in the amount of traffic on the internet. For example if everyone were to attempt to stream the newest episode of Orange is the New Black or House of Cards on Netflix HD at the same time, most ISPs systems would not be able to provide enough bandwidth. In order to alleviate congestion, ISPs have to build infrastructure to increase its systems bandwidth or it will have to open up new routes through other ISPs systems. When ISPs have to reroute data to another ISPs system they have to rent the bandwidth. Both methods to increase bandwidth come at the cost of the ISPs and cut into their profits. This was not a significant issue during the early stages of broadband; however, due to the increase in popularity of online gaming, streaming video and downloading, the current system was unprepared for the increased demand ICs and ICP's would place on the system.
The entire debate over net neutrality centers on the scarcity of bandwidth and who should pay for the increase or prioritization of bandwidth. This would mean that one or two groups would have to bear the brunt of the cost. Does the consumer have to pay more for their internet (North Americans pay among the highest rates for download speeds)? Do the ISPs bite the bullet and invest in more infrastructure to support an ever-increasing need for more bandwidth? "This will restrain Internet-based services to the ones currently offered where fibre optic networking cannot be delivered. The cost of refitting all US copper with fibre optics is estimated at $45 billion". Or do the ISPs begin to charge ICPs for bandwidth priority? ISPs are arguing that they should be able to divide the internet into a two-tiered system where companies have the option to pay for the prioritization of bandwidth in order to have faster transmission speeds to the consumer. The rationale behind this states that in order to increase the infrastructure for more bandwidth ISPs, would have to bear an enormous economic cost and that it is unfair that ICPs are acting as a freeloader. This is in spite of the fact that ICPs are already paying ISPs to host their websites. This debate has enormous implications on the future of the internet both politically and economically. Moving forward, this paper will take the standpoint that net neutrality should be defined as the prohibition against ISPs charging money for the prioritization of bandwidth and that the internet should remain open access as a free economic, social and political network. So how does the debate compare over various global regions? What are the shared values and where do they differentiate? To begin it will start with Ground Zero of the net neutrality debate: the United States of America.
As mentioned above, the net neutrality debate was triggered by the rather truculent remarks of one cable company CEO. However, the concept of network neutrality goes back to even before the invention of the telephone. In fact it dates all the way back to the use of the telegraph. In 1860 the United States Congress passed into law the Pacific Telegraph Act of 1860, which was designed to regulate the telegraph industry. This is the first attempt to legislate the idea of the common carrier. The primary function of this act was to prevent telegraph companies from prioritizing transmissions and discriminating transmissions based on the size of the document or the individual to whom the message is being sent. Telegraph companies also could not charge different rates to customers for a better level of service. Again there is a demonstration of the idea that the network itself should be neutral and that the overall control of content should be limited to the peripheries, in other words end-to-end principles. This continued with the rise of telecommunications and the use of the phone. In 1934, President Roosevelt signed into law the Communications Act of 1934. This prevented telecommuters and companies from discriminating transmissions and maintaining the idea of network neutrality. In addition, it also divided up the country between the major telecommunication companies. So the formation of the normative that has governed the net neutrality debate is almost 200 years old. The principal of the common carrier has governed telecommuting companies up until 2005 when the major change occurred; ISPs were reclassified as information providers rather than communication providers.
What this means is that ISPs were no longer governed under the previous communication acts. If ISPs were governed as telecommunication providers they would have remained common carriers, however, being reclassified as information providers meant they were no longer governed by the previous communication legislation. This left ISPs in a gray legislative area; on one hand the internet had developed into an entity that was more complex than any other telecommunication network in history. The level of bandwidth required to run the various functions of the internet and transmit data has exploded in the past number of years. Simply put, the current level of infrastructure required to operate the internet in the United States is woefully underdeveloped. On the other hand, with the introduction of new communications technology, the United States has always governed from the principal of the common carrier. Whether it was the telegraph, the telephone, cell phone, or the internet in its early stages when it used a dial-up router, it's always been governed by the idea that the network should be treated as neutral, with primary control relegated to the peripheries. This leads us into the current debate over net neutrality, how can you reconcile almost 200 years of normative behavior, the need for more infrastructure and who should bear the brunt of the cost?
As mentioned before, the United States is woefully underdeveloped in terms of its broadband service. Most Americans do not have access to reliable and affordable broadband service. In addition most Americans only have access to two or fewer broadband service providers, which creates a monopoly or duopoly for these broadband service providers. "In fact, major telephone and cable operators, which together control about 98% of broadband service in the United States (as of December 2005)" The question remains, how did these broadband service providers gain such a dominant share within the marketplace? To answer this question we have to go all the way back to the early diffusion of the telephone into the American communication market.
The early nineteenth century America saw the rapid expansion of the use of the telephone. However, in order to build up the infrastructure needed, telecommunication companies were given small monopolies over geographic regions. That way, when they began to build upper infrastructure, there was not duplications in the running of lines. That way AT&T and TBS would not overbuild in one area. This was fine in the early stages because capacity was higher than demand. Since then, however, the American government has taken a more hands-off approach to its communication sector allowing for a more laissez-faire development. In fact, with the introduction of cable the FCC attempted to block the building of cable lines over fears it would disrupt local broadcasting services. This policy ended up delaying the development of cable service in the United States. Considering that the overwhelming majority of people use cable rather than antenna, hindsight would dictate that this was bad policy. The lack of a public policy has made a profound contribution to the net neutrality debate.
With the lack of government policy, ISPs were never given the incentive to invest more than necessary. This was fine during the early stages of the internet because they were traditionally able to meet demand. However, with the explosion of the internet within the past decade and the ability to upload, download, and transfer vast amounts of data over the internet, cable companies in the United States simply lacked the capacity to meet these new demands. In order to maintain the network, cable companies have a number of options. The first is to build more infrastructures which would come at the cost to the cable companies. The cable companies can offset these costs by charging the consumer more or charging the content provider. The next option is attempting to prioritize data.
This leads us to the first major court challenge on the concept of net neutrality. In 2007 Comcast was accused of prioritizing its bandwidth and violating net neutrality. What they were accused of was slowing down the download speeds from peer-to-peer sites such as Bittorrent. This led to an investigation by the Associated Press where a reporter attempted to download the King James Bible, which was without a copyright therefore legal to download. The reporter timed the download speeds in various regions on the East and West Coast, using various internet service providers. When the AP attempted to download the King James Bible it had enormous difficulties downloading through the use of Comcast internet service. When compared to it's competitors, Comcast showed significantly slower download speeds
[When a peer-to-peer user attempts to download a file,] [e]ach PC gets a message invisible to the user that looks like it comes from the other computer, telling it to stop communicating. But neither message originated from the other computer—it comes from Comcast. If it were a telephone conversation, it would be like the operator breaking into the conversation, telling each talker in the voice of the other: "Sorry, I have to hang up. Good bye."
Comcast was able to do this using a "reset packet" that would covertly disengage the connection in the middle of the transferring process. Comcast denied that it was blocking internet traffic; however, it did admit to slowing down internet traffic from some sites. As soon as the FCC caught wind of the AP story it began to launch its own investigation.
Without going too much into the court decision the FCC eventually lost to Comcast on appeal, due to the fact that the FCC did not have the adequate enforcement tools and lack the jurisdiction to impose net neutrality in the strictest sense. However, this should be considered a mixed victory because it showed the FCC's willingness to defend the open Internet. In addition brought awareness to the net neutrality debate and in turn with a final step towards the proposed creation of legislation that will ensure the enshrinement of net neutrality rules. President Barack Obama has been asking for more legislation to expand the FCC's mandate and ensure America's commitment to net neutrality.
Although this paper so far as focus heavily on the United States and the net neutrality debate within that country, the debate over net neutrality is a global issue. Due to America's prominent position as a world industrial leader in the telecommunications industry, what happens in America influences the globe. The debate over net neutrality is no different, although it originated in 2005 in the United States is spread to most industrialized countries. Yet for a variety of reasons the debate differentiates into regional concerns. This will lead to the next stage of the paper showcasing the net neutrality debate in both Korea and the European Union.
Unlike the United States, with its limited access to reliable and affordable broadband Internet, the South Korean government has taken a leadership role within its country to develop a fast, inexpensive and reliable broadband service. Starting in 1996 the Korean government, through a series of master plans, has coordinated the development of the world's most heavily penetrated broadband Internet network. This allowed them to go from one Internet user per every hundred inhabitants in 1995 to over half the country by 2011. The Korean government was able to achieve this through long-term strategic planning, the creation of a highly competitive ISP market and the demand for inexpensive broadband.
Unlike the United States, which offers very limited options in terms of ISPs, South Korea has developed a very competitive market. In Korea, three national carriers dominate the better part of the broadband market, there is also is thriving market of smaller regional carriers. This is led to an intense level of competition among ISPs, which in turn has led to very competitive pricing with most Koreans paying around the low flat rate.
In terms of actual legislation to enforce net neutrality, the Korean government has yet to develop a coherent strategy to enforce an open Internet. Although they share many of the same values as United States in terms of user access and non-discrimination, due to the lack of lobbying power of Korean ISPs, there has been limited movement on the net neutrality debate. First of all, because of Korea's state-led broadband policy, the Korean market has ample bandwidth capacity. Second, Korea has a unique Internet market. Because of the level of penetration Internet use is much more prominent in the daily life of Koreans as opposed to other countries. Due to the popularity of online gaming, the ability to stream everything from TV shows, movies to even class lectures there is an intense desire to maintain an affordable and reliable broadband network.
Europe presents an interesting case in terms of the net neutrality debate. On the one hand, many of the same issues plague the European debate that also plague the American debate. Like it's American counterpart across the ocean for the major issues plaguing the net neutrality debate in Europe is bandwidth scarcity within the marketplace. Therefore, European ISPs are attempting to lobby the government in order to give them the capabilities to charge Internet content providers for prioritization of data. This is compared to Korea where they have a surplus of bandwidth, which is why that neutrality has not become a major political issue.
In terms of neutrality as a political issue, European governments have yet to develop any form of concrete regulation or even a sense of direction in terms of the net neutrality debate. This in contrast to the United States where the American government has made clear that they support net neutrality and are attempting to ensure legislation to protect open access. Due to the lack of legislation within the European market, this has allowed the development of bad behavior amongst ISPs.
"A case in point is charging mechanisms, whereby network operators charge extra, or force users to contract on the most expensive tariffs, in order to enjoy specific uses of the Internet. This is already a widespread practice in Europe for tethering, VoIP or Instant Messaging. As a matter of fact, all French mobile network operators apply extra charges for particular uses, and are allegedly preparing to extend that discrimination to fixed Internet access".

However, in terms of values, European consumers can not be differentiated between the Americans in the Koreans. There still a deep concern over the potential loss of free speech through the regulation of the Internet. Next, there is a concern over the potential loss of innovation on the part of the ICPs, with the fear that ICPs will only focus on their country of origin rather than maintain a global focus. This is due to the added cost of doing business in terms of prioritizing their data; with the focus on the country of origin there is a potential loss of market share in terms of expanding their presence on the Internet. Finally, there is the idea of access to the Internet. Through data prioritizion and Internet regulation, there is a fear that there could be a potential loss of access to the Internet. With the end of net neutrality in Europe, the consumer may find it difficult to receive data coming from another country, which in turn would disrupt the user experience.
The major issues over the net neutrality debate are the incentives to invest. The cable companies routinely argued under the current guidelines that net neutrality does not incentivize investment. They argue that under the current framework they would have to bear the soul burden of increasing bandwidth. Therefore they should be able to charge to prioritize data to the ICPs. This would open up a massive stream of revenue for the cable companies in order to increase investment in infrastructure. Therefore, if these companies did have more money to invest to increase bandwidth there would be a net benefit to the consumer. They would be able to stream, download, access information faster increasing the overall quality of service. Even for some ICPs, although they would lose money through the need to pay to have their data prioritized, they would be able to recoup some, if not all of, of their losses through an increased user experience.
There is a fundamental problem with that line of thinking. The whole issue of the net neutrality debate centers on a lack of bandwidth. Therefore, it is within the ISPs interests to maintain a high-level of bandwidth scarcity. This would allow them to maintain a high value for the access to the "fast lane". The net result is that in a non-neutral internet there is still no incentive to maintain a high level of investment in the building of new infrastructure. The non-neutral internet does not remedy the issue of lack of bandwidth; if anything it has the potential to exacerbate it. "The argument is that not only do additional profits tend to benefit shareholders rather than being devoted to new investment or higher quality, but also that it is more difficult to charge higher prices for priority lanes in the event of upgraded networks without congestion." Unless a non-neutral internet is carefully regulated to ensure ISPs are allocating adequate funds to investment of infrastructure there is no guarantee that a non-neutral internet would remedy lack of bandwidth and improve the overall consumer experience with the internet.
The next major issue within the net neutrality debate is the idea that the closing off of the internet would stifle innovation. As has been mentioned for the present paper, the internet has been historically an economic free zone, with primary control over the creation and consumption of data relegated to the peripheries. Because all data is created equal, no internet company has an advantage over the next, this is why Facebook was able to overtake MySpace, and Twitter has the potential to overtake Facebook as the primary means in which people share information. Therefore it could be necessary to maintain an open internet to ensure its overall flexibility, generality, and openness. Therefore, any attempts to close off the internet could have a drastic impact on a new company's ability to compete with established internet companies. With a lack of competition there could be a reduction in innovation, which would limit the consumers user experience.
However, by closing off the internet and prioritizing data, there would be a net benefit to the major internet companies. This would enable them to exercise a greater control over the marketplace. For example, in a closed-network, Netflix could pay for access to the fast lane whereas a competitor such as Project Free TV which offers free streaming would be unable to access the fast lane due to its lack of revenue and ability to pay. In addition, in a closed internet, an ISP could potentially slow down the data being accessed from that site which would decrease the overall consumer user experience. This could also be done to, and has been done to, peer-to-peer sites, which could slow down download speeds. This could provide a disincentive in the desire to pirate movies off the internet, further reinforcing Netflix market shares as the primary medium in which consumers watch movies and television shows. This would also allow for an effective way to enforce copyright on the internet. The basic reality is that not only would a non-neutral internet benefit these major ICP's, it could also potentially give them a virtual monopoly over the way in which consumers received their data.
The final concern within the net neutrality debate is the potential infringement on the political rights of individuals. By changing the Internet from its current end-to-end principles through the closing off the Internet, there is a growing fear among activists that cable companies would be able to subvert freedom of speech. This would be done through the blocking of certain political and pro-labor movement websites. In addition, by creating an uneven playing field, Internet sites that can afford to pay for access to the priority Lane could develop a monopoly on the production of information with the result skewing the political perception of the populace.
Although there is evidence that ISPs have been willing to disrupt Internet traffic -as demonstrated by Comcast- there has been no evidence of them actually blocking a website. In fact, by allowing cable companies to have the ability to slow down or possibly block traffic that could be an effective way of disrupting Internet crime. By allowing them to block Internet traffic for criminal sites such as the Silk Road or child pornography sites, a closed Internet could provide some degree of public good. By providing regulatory bodies such as the FCC with the adequate tools and enforcement, making the process of blocking content transparent and with the adequate legislation, governments could ensure that cable companies are unable to infringe upon the rights and freedoms of that particular nation's citizen.
There is one final wrinkle to the net neutrality debate: as mentioned numerous times throughout the paper the primary issue is the scarcity of bandwidth. Also mentioned is that American telecommunication companies have a nearr-monopoly on the telecommunications and Internet market. However, for the past couple years Google has expanded its business to include becoming an ISP. Through the development of Google fiber, Google has increasingly begun to provide select American cities with access to fiber-optic Internet. What is interesting about Google fiber is that apart from the installation fees, it provides Internet for relatively inexpensive cost at the same time allowing for the fastest download speeds within the United States. It is unclear whether Google is attempting to expand and become an Internet service provider or if it's attempting to put pressure on existing ISPs. That being said, Google has announced plans to expand into a number of American cities. With Google's commitment to the open Internet this could be a very positive development for proponents of neutrality. However, it remains to be seen whether or not this pilot project will be profitable enough to compete with the already existing ISPs. There is also another dynamic on whether or not it is wise to allow Google to become both an ISP and ICP.
The debate over net neutrality is still in infancy, with no clear end in sight. With any number of stakeholders having much to gain while at the same time having much to lose. On the innovation standpoint, closing off the Internet would not remedy the problem of lack of bandwidth and if anything would exacerbate it. It would solely be in the cable company's interest to maintain artificial scarcity of bandwidth. On top of that, major ICPs would be able to monopolize their market share due to the fact they would be able to afford greater access to faster and more reliable broadband. In terms of the political fears surrounding a potential loss of freedom of speech a carefully legislated non-neutral Internet would be able to provide a greater amount of public good. This will be done through the blocking of criminal sites in a transparent fashion. In terms of whether or not nations should begin to allow for the closer of the Internet, there is simply not enough of an economic benefit. Closing off the Internet would disproportionately benefit major corporations, while at the same time there is simply not enough evidence to support the idea that the consumer experience would be improved by ending the neutral network. Therefore the Internet should remain open for the foreseeable future.




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