The Economics of 'Wireless Net Neutrality'

Abstract:     
Network neutrality issues have been vigorously debated worldwide over the past few years. One major aim of network neutrality proponents is to prevent high-speed Internet service providers from charging content providers for priority delivery. Recently, proponents have turned their attention to the regulation of wireless networks, such as those for cellular phones, which provide increasing numbers of consumers access to Internet services. Some application providers have relied on a recent academic paper to support greater regulation of wireless operators. Although the proposals to regulate these networks use the phrase "net neutrality," the regulations they seek to impose on wireless operators have little in common with those being sought for other Internet service providers. In this article, we provide a framework for determining whether certain kinds of regulations should be imposed on the owners of wireless networks. We also consider the benefits and costs of specific proposals for the regulation of these networks. Our principal conclusion is that the costs of most of these proposals are likely to exceed the benefits.

Keywords: network neutrality, regulation, wireless networks

JEL Classifications: H00

Working Paper Series