Do Conduit Neutrality Mandates Promote or Hinder Trust in Internet-Mediated Transactions?
31 Pages Posted: 5 Nov 2011
Date Written: November 1, 2011
As the Internet evolves and matures, Internet Service Providers (“ISPs”) have begun to create increasingly diversified business models for serving downstream end users and upstream content providers. Increasing subscriber demand for broadband connections necessitates efforts to identify and serve new profit centers and to differentiate retail and wholesale users on the basis of subscriber bandwidth requirements and other customer-specific demand characteristics. ISPs have identified new strategies to differentiate their offerings on the basis of price, quality of service, transmission speeds, permissible amount of capacity uploaded and downloaded, legitimate network management objectives and the demand for customer-specified network features. Advocates for limiting price and service discrimination contend that absent a “network neutrality” mandate, ISPs will discriminate in ways that harm competitors by favoring corporate affiliates and selected third parties. Network neutrality supporters claim that ISPs have both the incentive and ability to engage in harmful discrimination, typically characterized by ISPs as necessary network management, or a legitimate response to the specific requirements of a customer.
This paper will consider ISP conduit neutrality in the context of whether and how legislatures and national regulatory authorities can enhance trust and network reliability. The paper assesses how network management techniques can offer both quality of service improvements and deliberately inferior service. Because technological innovations provide the ability to build trust in Internet-mediated transactions, the paper will identify legislative and regulatory strategies that promote network management that enhances cloud computing, electronic commerce and other transactions without according ISPs unconditional opportunities also to harm competition and consumers.
Keywords: ISPs, network neutrality, trust, ecommerce
JEL Classification: K23, L86, L96
Suggested Citation: Suggested Citation