Neighbor Billing and Network Neutrality

Virginia Journal of Law & Technology, Vol. 11, No. 9, Fall 2006

33 Pages Posted: 29 Jul 2010 Last revised: 23 Dec 2013

See all articles by Justin (Gus) Hurwitz

Justin (Gus) Hurwitz

University of Nebraska at Lincoln - College of Law; International Center for Law & Economics (ICLE)

Date Written: July 28, 2010

Abstract

This Article explains that the Internet is inherently non-neutral, and that this non-neutrality stems from the very architectural features that make the Internet a cost-effective means of communication. I argue that the ongoing network neutrality debate is better understood as being about the allocation of the costs of the Internet infrastructure. Instead of focusing on whether different parties are “neutrally” charged for Internet access, this Article focuses on how best to allocate these costs to maximize the value of the infrastructure. To this end, this Article proposes a model rule, “neighbor billing,” which is based in the economics of multi-sided markets to reduce the effects of the current potential market failures without creating new ones. This rule pushes pricing decisions into the network core, which allows internal market forces to allocate costs as appropriate, without need for external regulation. Though not a perfect rule, this proposal suggests considerations of importance to the ongoing network neutrality debate.

[NB: This version may contain non-substantive differences from the version as published]

Suggested Citation

Hurwitz, Justin (Gus), Neighbor Billing and Network Neutrality (July 28, 2010). Virginia Journal of Law & Technology, Vol. 11, No. 9, Fall 2006. Available at SSRN: https://ssrn.com/abstract=1650380 or http://dx.doi.org/10.2139/ssrn.1650380

Justin (Gus) Hurwitz (Contact Author)

University of Nebraska at Lincoln - College of Law ( email )

103 McCollum Hall
P.O. Box 830902
Lincoln, NE 68583-0902
United States

International Center for Law & Economics (ICLE) ( email )

5005 SW Meadows Rd.
Suite 300
Lake Oswego, OR 97035
United States

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