Network Neutrality or Internet Innovation? Granting Network Providers Pricing Flexibility Should Reduce the Costs Borne by Consumers
Yoo, Christopher S., Regulation
Network neutrality has received sustained attention from both policymakers and academic commentators for the past several years, and it shows no signs of retreating from the forefront of the policy debate. President Obama effectively ensured that network neutrality will remain at the top of the policy agenda by including provisions in the 2009 stimulus package that require the Federal Communications Commission to formulate a national broadband plan. The stimulus package also requires that grants made by the National Telecommunications and Information Administration comply with four network neutrality principles first articulated by the FCC in 2005. On October 22, 2009, the FCC initiated proceedings to codify and expand the 2005 principles. President Obama reaffirmed his support for network neutrality in a YouTube interview conducted shortly after his 2010 State of the Union address.
Pinning down a precise definition of network neutrality is difficult. Roughly speaking, it requires network providers to route traffic without regard to the source or content of the packets of data that move across the Internet, the application with which those packets are associated, or the sender's willingness to pay. In the words of leading network neutrality proponent Lawrence Lessig, "Net neutrality means simply that all like Internet content must be treated alike and move at the same speed over the network."
It would be surprising if any two similar packets would be treated exactly alike when traveling through a network consisting of more than 30,000 autonomous systems that determine their terms of interconnection through arms-length negotiations. Indeed, many commentators have noted that such equal treatment did not occur over much of the Internet's past, when it was far less complex. Now, systematic changes in the architecture of the Internet make identical treatment even less likely, yet the changes are largely the result of network providers' attempts to reduce cost, manage congestion, and maintain quality of service. These changes may not represent network providers' efforts to promote their self interests at the expense of the public, as some network neutrality proponents have suggested, but instead they have the potential to yield substantial benefits both to individual consumers and to society as a whole.
THE EARLY INTERNET
When the Internet first emerged, its topology and the business relationships comprising it were relatively simple. The Internet evolved out of the National Science Foundation's NSFNET backbone, which was created in 1986 (and decommissioned in 1997) to provide universities all over the country with access to federally funded supercomputing centers located at five major universities. The primary architects of NSFNET decided to give it a tripartite structure. At the top was the NSFNET backbone, which at its peak connected 16 research facilities across the country. At the bottom were the campus networks run by individual universities. In the middle were regional networks (typically operated by university consortia or state-university partnerships) that linked the campus networks to the major computing centers.
Every data packet had to travel through a parallel path traversing each level of the hierarchy. For example, traffic originating on one campus network would have to connect to the regional network with which it was associated, which handed off the traffic to the NSFNET backbone, which in turn handed it off to the regional network that served the destination campus network. The result was to create a series of parallel hierarchies through which all traffic had to traverse.
The network retained this same basic architecture when it was privatized during the mid-1990s. The NSFNET backbone at the top of the hierarchy was replaced by a series of private backbone providers that interconnected with one another at four public network access points established by the National Science Foundation. …