Assessing the Merits of Network Neutrality Obligations at Low, Medium and High Network Layers

Abstract

The United States Federal Communications Commission (FCC) has issued a Notice of Proposed Rulemaking (NPRM) that would codify rules aiming to preserve a free and open Internet for consumers. The NPRM concentrates on the relationship between end users and Internet Service Providers (ISPs), but also solicited comments on whether the Commission should apply one or more Internet openness principles as obligations on providers of content, applications, and services. Extending network neutrality obligations over the top of ISP traffic transmission links to and from content providers would apply an ill-advised and jurisdictionally suspect regulatory model. While the FCC‘s public interest mandate may support some consumer protection regulatory safeguards against anticompetitive and discriminatory conduct of facilities-based ISPs, the Commission has no legal basis to regulate content providers and meddle with the robustly competitive marketplace for content and services.

The FCC‘s initiative responds to concerns about the behavior of ISPs in their capacity as first and last mile providers of Internet access and as intermediaries between consumers and sources of content, applications, and services. Empirical and anecdotal evidence prompted the FCC to consider the need for enforceable rules to ensure that ISPs do not engage in anticompetitive behavior masquerading as legitimate network management, or otherwise reduce the spillover benefits accruing from Internet access. However, no such evidence points to any dysfunction in the marketplace for content, applications, and services available via the Internet.

The marketplace of ideas available via the Internet is as vigorous and open as any medium of communications so long as facilities-based intermediaries cannot use the excuse of network management requirements to pursue anticompetitive and harmful strategies requiring interference with the flow of traffic upstream from content sources and downstream to end users. The FCC and other national regulatory authorities (NRAs) have acknowledged the different characteristics of network access vis-á-vis the content and applications that ride over ISP transmission links. While the content and applications marketplace offers unlimited options, consumers may have only one or two viable broadband Internet access options.