Managing the (Traffic) Managers TECHNICAL, ECONOMIC AND LEGAL ISSUES AROUND NET NEUTRALITY

Introduction Technical Issues: Managing Capacity Economic Interests: Managing Interests and Externalities Legal Issues: Managing Fairness Political Issues: Managing Freedoms No solutions, only questions!

How to manage internet traffic in a way that is economically efficient, legally justifiable, and respects human rights?

Technical Issues: Managing Capacity New services and digital convergence But the same old wires and connections The long-term solution – more innovation, better infrastructure But in the short term, traffic is managed… but how? By volume? By application? By IP address? And for what motivation?

or… Sources: Wikimedia Commons: https://en.wikipedia.org/wiki/The_Traffic_Policeman Monty Python Wikia: http://montypython.wikia.com/wiki/File:Bridge_of_Death_monty_python_and_the_holy_grail_591679_800_4411271399897.jpg

Economic Issues (1/3): Managing Interests and Externalities The Virtuous Circle: Better content and services… … over better networks… … lead to more demand… … and so more investment and competition (and/or the other way around) Innovation in Services and Networks Increased Demand for Broadband Increased Investment and Competition Source: OECD

Economic Issues (2/3): Managing Interests and Externalities Consumers want to: Get value for money (Closed garden? Open prairie?) Risk of abuse? Established Content Producers want to: Maximise revenue – optimise customer base Minimising costs – avoid additional payments Potentially do deals? New/Non-Commercial Players want to: Maximise reach Free access a ‘subsidy for creativity’ Shared interest in high quality, low cost connection

Economic Issues (3/3): Managing Interests and Externalities For ISPs, a long term interest in better content, and loyal paying customers But investment is uncertain In the short-term: Need to recoup costs of investment, reward shareholders (and invest), so… Find efficiencies through traffic-shaping Seek money from other ISPs? Seek money from content providers? Seek money from consumers?

Legal Issues: Managing Fairness One Gatekeeper or Many? Competition – promote consumer welfare, now and tomorrow Can consumers switch? Costs? Transparency vs confusopoly? Lower barriers to entry? But if not Enforcing quality of service Enforcing net neutrality

Political Issues: Managing Freedoms? Not just any type of telecoms network Universal Non-commercial origin A human right? Privacy implications Fears of reversing freedom of expression and access to information gains?

Sources Lee, Robin S. and Wu, T. (2009), Subsidizing Creativity through Network Design: Zero Pricing and Net Neutrality, Journal of Economic Perspectives (Vol. 23, No. 3, Summer 2009), pp 61-76 OECD (2016), Digital Convergence and Beyond – Innovation, Investment and Competition in Communication Policy and Regulation for the 21st Century – Background Report for 2016 Ministerial Meeting on the Digital Economy Evans, D. (2011), Net Neutrality Regulation and the Evolution of the Internet Economy, Paper submitted for a hearing by the OECD’s Working Party on Competition and Regulation Werbach, K. (2013), The Development of Fixed Broadband Networks, OECD Digital Economy Papers No. 239, OECD Publishing Cave, M. (2011), Competition and Consumer Protection Issues in the Net Neutrality Debate, with Special Reference to Europe, Paper submitted for a hearing by the OECD’s Working Party on Competition and Regulation Wu, T. (2002), A Proposal for Network Neutrality Wu, T. (2005), Network Neutrality, Broadband Discrimination, Journal on Telecommunications and High Tech Law (Vol 2) OECD (2007), Internet Traffic Prioritisation: An Overview, OECD Publishing