Spillovers and Network Neutrality
Wesleyan University - Department of Economics
June 29, 2010
REGULATION AND THE PERFORMANCE OF COMMUNICATION AND INFORMATION NETWORKS, Gerry Faulhaber, Gary Madden, Jeffrey Petchey, eds., Edward Elgar, Forthcoming
Proposals for network neutrality are usually justified at least in part based on positive spillovers and externalities related to an “open” Internet. Almost everyone would agree that the Internet generates a great many positive benefits throughout the economy, but there is much less agreement as to whether these benefits are “spillovers” or “externalities” in an economic sense. The answer to that question has significant implications for whether regulation is justified and how it should be designed. This essay examines three sources of benefits from the Internet - general purpose technology, network effects, and innovation - and evaluates whether they could in fact be reduced by private, potentially non-neutral behavior by ISPs.
Number of Pages in PDF File: 21
Keywords: network neutrality, externalities, spillovers
JEL Classification: L51, L96
Date posted: June 30, 2010
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