Despite a couple years of debate about network neutrality, rarely have concrete proposals emerged from those who advocate for this government control of the Internet. Typically they have limited themselves to urgent sound bites to whip others into a frenzy.
However, a few pundits have set down on paper what they think the rules actually ought to look like, as in a recent article by Howard Shelanski entitled "Network Neutrality: Regulating With More Questions than Answers.”
Shelanki points out that the free market perspective cannot show that the platform owners never benefit from discrimination against competitors. How does the free market side respond? Assuming that the pricing math is right, we must also factor in long run reputational concerns, the possibility of retaliation, and a plethora of other real world factors.
One would be quite astonished if businesses--even ones with substantial market power--began hiring game theorists to make their decisions for them. No set of rules is going to get the best result in every possible set of circumstances. The best one can do is follow general rules. Shelanski tries to figure this one out, coming up with a rule that restricts the most-likely bad kinds of discrimination but allows some tiered pricing.
Left out of the picture is the massive and very real risk of regulatory failure.
Markets don't always reach someone’s idea of a perfect result, but typically the market delivers results that are better than a central command approach. By contrast, every regulatory system that Shelanski cites as a model, from antitrust to common carriage, has lead us into a static innovation-killing bog.
The end of the paper gets it right--start with big picture policies like freeing up spectrum to enhance competition among networks. History has laid a heavy burden of proof on the proponents of regulation to show not only that there is a theoretical possibility of abuse on the part of network owners, but that there is any real possibility that their cure won't be worse than the problem, and send a fairly healthy industry into a debilitating illness.