The Open Internet: A Customer-Centric Framework

International Journal of Communication, Vol. 4, 2010

41 Pages Posted: 20 Mar 2010 Last revised: 23 Dec 2013

See all articles by Gerald R. Faulhaber

Gerald R. Faulhaber

University of Pennsylvania - Wharton School

David J. Farber

Carnegie Mellon University - School of Computer Science

Date Written: March 19, 2010

Abstract

The Federal Communications Commission’s Notice of Proposed Rulemaking, “Preserving the Open Internet,” is the most significant reach of regulatory power over the Internet in U.S. history. The NPRM proposes a set of regulations for broadband ISPs corresponding to the four principles previously adopted by the Commission, plus two new ones: nondiscrimination and transparency. We strongly support customer-focused transparency by all Internet firms, not just broadband ISPs. We oppose, however, the remaining five proposals to implement network neutrality for broadband ISPs as both unnecessary and harmful. We find that there is nothing here to be fixed, and that there is no market failure. The regulations are not only unnecessary; they would impose significant costs on broadband customers. We find that the costs that would be imposed on wireless broadband would be particularly punishing, and likely to permanently harm that industry.

We instead propose that the FCC focus its energies on bringing more competition to the already rivalrous broadband marketplace, a goal which is within reach. Over a dozen wireless carriers now provide 3G service, and 4G service, which can substitute even more effectively for many Internet uses that were previously confined to wireline, is imminent. It is essential that the FCC release substantial amounts of licensed spectrum into the marketplace so that this additional competition can emerge quickly. The FCC should not waste its time with pointless, costly regulation; it should facilitate competition so that customers can choose for themselves if and how much network neutrality they want. Let the customers decide; not regulators, not pundits, not advocates.

Keywords: Network neutrality, regulation, FCC, customer-centric, broadband

JEL Classification: L51, L86, L96

Suggested Citation

Faulhaber, Gerald R. and Farber, David J., The Open Internet: A Customer-Centric Framework (March 19, 2010). International Journal of Communication, Vol. 4, 2010. Available at SSRN: https://ssrn.com/abstract=1574971

Gerald R. Faulhaber (Contact Author)

University of Pennsylvania - Wharton School ( email )

Steinberg-Dietrich Hall
Suite 1400
Philadelphia, PA 19104-6372
United States
215-898-7860 (Phone)

David J. Farber

Carnegie Mellon University - School of Computer Science ( email )

5000 Forbes Avenue
Pittsburgh, PA 15213
United States

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