Net Neutrality: A Radical Form of Non-Discrimination: Regulators Should Not Interfere with the "Coming Exoflood."
Singer, Hal J., Regulation
Despite the fact that the current net neutrality debate has drawn the attention of many academics and consultants, it is hard to find a precise definition in the literature of what "net neutrality" means. In layman's terms, net neutrality is about the politics of envy: if a website cannot afford certain bells and whistles, then its rivals should not be allowed to acquire such enhancements. In economic terms, net neutrality represents the prohibition of any contracting for enhanced service or guaranteed quality of service (QoS) between a broadband service provider and an Internet content provider.
Such a prohibition would unwind existing contracts for QoS between broadband service providers and content providers. The anticompetitive harms that would be allegedly spared from such a prohibition pale in comparison to the efficiencies made possible by such contracting. Accordingly, net neutrality legislation should be rejected.
CURRENT FORMS OF TIERED QoS
There are two types of customers who are already purchasing enhanced QoS offerings from broadband service providers: end-users (primarily enterprise customers) and content providers. Not all content providers demand enhanced QoS. This option is demanded only by those content providers that supply QoS-needy content. Real-time applications represent an important type of QoS-needy content. Real-time video, Voice over Internet Protocol, and online video game traffic cannot be experienced properly by the end-user if it is subjected to jitter (unevenness in the rate of data packet delivery). Accordingly, real-time content providers demand enhanced QoS. The QoS offerings aimed at content providers are the target of net neutrality proponents.
Net neutrality proponents speak of "access tiering"--that is, offering tiered levels of QoS at different prices--as if it is some hypothetical strategy that will be employed at some future date to foreclose unaffiliated content providers. In reality, tiered QoS offerings are already here at different layers of a broadband service provider's network, and for legitimate technical and economic reasons. Content providers are voluntarily entering into contracts with broadband service providers presumably because content providers (and their customers) value the service enhancements more than the prices for the enhancements.
Enhanced QoS is not forced upon content providers as part of some bundle of services that the providers otherwise do not want, or because the broadband service provider has monopoly power over the supply of one of the products in the bundle. Furthermore, broadband service providers offer enhanced QoS at a surcharge to content providers, not because they are trying to foreclose potential rivals in an upstream market or to degrade the quality for content providers that decline the QoS option, but because it is costly to offer such enhancements and because a managed network ultimately generates benefits for Internet users.
Broadband service providers currently may offer enhanced QoS to content providers in the form of managed hosting, local caching of content in nearby data centers, and prioritization of traffic at the IP packet layer. By purchasing hosting services from a broadband service provider, a content provider can gain immediate access to the provider's network. A content provider can also take advantage of the provider's service level agreements (SLAS), under which the broadband service provider is required to provide proof of a promised level of service. Each SLA contains a technical component, which offers several classes of service. A content provider can request that a broadband service provider offer a fully managed hosting solution or it can manage its own applications hosted in an Internet Data Center (IDC) owned by a broadband service provider. For example, Qwest offers the following commitment to customers that outsource their Web presence: "You receive industry-leading SLAS. …