Economics of Net Neutrality: A Review

Communications & Convergence Review, Vol. 3, No. 1, pp. 53-64, 2011

20 Pages Posted: 25 Jul 2011  

Gerald R. Faulhaber

University of Pennsylvania - Wharton School

Date Written: June 9, 2011

Abstract

Network neutrality has been at the center of US telecommunications policy for several years, culminating in a recent FCC order imposing a limited form of net neutrality on US broadband Internet Service Providers (ISPs). The regulatory imposition of nondiscrimination and price regulation (the core of net neutrality) on ISPs has been hotly debated. In this paper, I review the recent economics literature on net neutrality. There is little evidence that violations of net neutrality have actually occurred, several papers suggest that there could be potential problems in the future. Most papers, however, suggest that prophylactic net neutrality regulation is unnecessary and may well be welfare-reducing. Most papers suggest that waiting for actual ex post evidence before regulatory interventions is the soundest policy.

Keywords: network neutrality, regulation, Internet, Internet Service Providers, broadband

JEL Classification: L51, L86, L96

Suggested Citation

Faulhaber, Gerald R., Economics of Net Neutrality: A Review (June 9, 2011). Communications & Convergence Review, Vol. 3, No. 1, pp. 53-64, 2011. Available at SSRN: https://ssrn.com/abstract=1894286

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)

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