First, Assume a Monopoly: The Failure of Vertical Foreclosure Theory on the Never-was-Neutral Internet

Abstract

Internet service providers and their customers have understood and debated the concepts of net neutrality since the beginning of the era of dial-up bulletin board systems. Commentators have only recently joined the debate, and often overlook history. No commentator, legislator, or regulator can be certain how networks and technologies will evolve over the next decade - especially when they misunderstand how those networks evolved over the last one.

This paper refocuses the net neutrality debate by challenging the application of vertical foreclosure theory to today's non-neutral Internet access and content markets. The paper finds that the current policy fascination with non-existant net neutrality is ill founded. Disclosure and a broader focus on both network and content providers' non-neutral traffic policies would better enable the market to choose technologies and business models dynamically while still providing regulators with a potential enforcement mechanism.

Keywords: net neutrality, FCC, broadband, Internet, monopoly, economics, vertical foreclosure