Can Internet Service Providers Lawfully Enhance, or Degrade Third Party Content?
Posted: 20 Mar 2017
Date Written: March 1, 2017
This paper will assess the potential for harm to broadband consumers and competitors when United States Internet Service Providers (“ISPs”) tier service by combining so-called unlimited usage with reduced video image resolution, and also by not metering usage when subscribers access specific content sources. ISPs previously generated no regulatory concerns when they developed different tiers of service and price points based on content transmission speeds and monthly allotment of data consumption.
However, recent “zero rating” and “unlimited” data offers have triggered questions whether ISPs engage in unlawful paid prioritization of certain traffic from specific sources as well as traffic degradation by receiving high definition video content, but delivering it in lower standard definition. Additional questions address whether ISPs engage in traffic throttling by slowing traffic delivery speeds when subscribers exceed a monthly downloading threshold, or temporarily slowing speed when high volume subscribers seek service in a congested area.
The paper concludes that even though ISPs have self-serving, profit maximizing goals when enhancing, or degrading content carriage and display, such practices can have positive spillover effects that enhance consumer welfare without significantly harming competition in the marketplace of ideas and Internet commerce. On the other hand, the paper recommends the Federal Communications Commission (“FCC”) implement a speedy and fair complaint resolution process to remedy content carriage disputes.
While the FCC summarily rejected any violation of the First Amendment in the imposition of network neutrality rules, the paper suggests that some ISP-imposed carriage terms may have the potential for harming the marketplace of ideas and artistic works. The paper considers whether downgrading the screen resolution of received content violates the First Amendment and notes that that Congress required cable television operators to deliver high definition signals without the option of degrading line resolution to conserve bandwidth. The paper suggests that the FCC not prohibit service arrangements that incorporate content delivery degradation, provided subscribers receive full disclosure of the practice.
Keywords: zero rating, sponsored data, unlimited data, network neutrality, open Internet, First Amendment
JEL Classification: K23, L43, L82. L86, L96
Suggested Citation: Suggested Citation