Internet economics: needless net neutrality.

• Author: Suderman, Peter
• Position: Citings - Brief article

IN SEPTEMBER, the White House Office of Management and Budget signed off on regulations that restrict the freedom of Internet service providers to manage web traffic. The Obama administration says the "net neutrality" rules, which were scheduled to take effect in November, are necessary to prevent Internet Service Providers from prioritizing data, or blocking services offered by competitors.

But a recent paper by University of Pennsylvania economist Gerald Faulhaber published in the journal Communications Convergence Review suggests this threat is almost entirely hypothetical. Faulhaber notes that the Federal Communications Commission (FCC),which drew up the rules, admits they are "prophylactic." In fact, the FCC says the regulations are based on "longstanding openness principles that are generally in line with current practices and with norms endorsed by many broadband providers."

Faulhaber writes that "one has to read the [report and order...