A "Third Way" on Network Neutrality

The highly intelligent Lynne Keisling finds something interesting on net neutrality:

Knowledge Problem: A "Third Way" on Network Neutrality: Regular KP readers might have noticed my reticence to opine on the current net neutrality roilings (which is why I am grateful to Mike for picking up the slack). There's a good reason for that: I don't find either of the polemic, binary, extreme positions that are being argued and memorialized in legislative proposals compelling or fully correct. I find the arguments in favor of so-called net neutrality histrionic and likely to lead to stagnation of the Internet. I am (much) more compelled by the arguments in favor of not regulating net neutrality, but I still have concerns about owners of the fixed wires infrastructure being able to earn uneconomic rents during the process of Schumpeterian competition for the post-broadband platform. Given that position, I thought it better to keep my mouth shut.

But no longer! I have ammunition! This ammunition takes the form of Rob Atkinson's and Phil Weiser's paper, A "Third Way" on Network Neutrality. Phil is one of the most thoughtful and knowledgeable scholars on this question (and I'm sure I'd say the same about Rob if I knew him!), so I take his arguments seriously. And this argument deserves to be taken seriously. For example,

We believe that the current state of the network neutrality debate, like many polarized issues, denies the reasonable concerns articulated by each side and obscures the contours of a sensible solution. In this paper, we outline both the reasonable concerns of each side in the debate with respect to the future of the Internet, as well as the claims made by each side that we believe are not factually correct or economically supportable. We hope that by doing so, and by placing the issues into a proper context, we can shed light on the underlying issues as well as articulate the essential elements of a sensible and effective solution.

Their "sensible and effective solution" involves three basic concepts: open information (broadband providers should state their access terms and usage policies clearly) for consumer protection, an ex post antitrust-competition policy approach instead of an ex ante preventive regulation approach, and targeted tax policy to encourage broadband investment. They take seriously the issue of complementarity within networks; in other words, for example, the idea that access to Google and other applications increases the value of broadband access, so what economic incentive do they have to limit your access if it means you would be willing to pay less for their broadband service?

I heartily encourage you to read this short, concise, well-written, reasonable argument. I don't agree with all of it (not surprisingly, I'm not a big fan of social engineering through tax policy), but I think this approach strongly dominates all of the polemic legislative proposals that are being considered.