Would Mandating Broadband Network Neutrality Help or Hurt Competition? A Comment on the End-to-End Debate

Abstract:     
A chorus of commentators has drawn inspiration from the end-to-end argument first advanced by Saltzer, Reed, and Clark and called upon policy makers to mandate that last mile broadband providers adhere to certain principles of network neutrality. In this symposium contribution, Professor Christopher Yoo offers an economic critique of these proposals, concluding first that they are based on a fundamental misreading of Saltzer, Reed, and Clark, who actually reject attempts to turn the end-to-end argument into a categorical mandate. In addition, prohibiting the use of proprietary protocols can harm consumers by skewing the Internet towards certain types of applications. Finally, network neutrality raises the even more significant danger of forestalling the emergence of new broadband technologies by reinforcing the existing supply-side and demand-side economies of scale and by stifling incentives to invest in alternative network platforms. Although such considerations would be problematic under any circumstances, they carry particular weight with respect to industries such as broadband, which are undergoing rapid technological change.

Keywords: Telecommunications,regulated industries,cyber-law

JEL Classifications: K2, K23, L96, H0

Accepted Paper Series