Thursday, December 22, 2011

The Economics of Network Neutrality

From The CATO Institution:






Information Technology





The Economics of Network Neutrality



by Gerald R. Faulhaber



Cato Institute



December 20, 2011



Regulation





The economic evidence does not support prophylactic net neutrality regulation. In the absence of significant evidence of “bad behavior” by broadband ISPs over the past decade, the extensive literature is unable to support such regulation. Even articles specifically arguing for net neutrality regulation cannot make an unambiguous case for regulation, as this review demonstrates. I again rely on Owen to state it best: “Thus, it is reasonable to conclude that prophylactic regulation is not necessary, and may well reduce welfare. Sound policy is to wait for ex post evidence of harm to justify interventions in specific cases.”





URL: www.cato.org/pubs/regulation/regv34n4/v34n4-4.pdf

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