Competition Can Protect the Open Internet

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1 Response

  1. Brett Frischmann says:

    Tim,

    Thanks for participating. I expected you’d disagree on these grounds. I refer to your 2008 paper that makes a related point. I do appreciate your argument. It seems to me that your confidence in competition hinges on at least two premises that I am not so confident about: first, the crudeness of network filtering/prioritization/discrimination technologies, and second, a belief that consumers will continue to choose open over closed infrastructure. While I discuss the private incentives of networks to discriminate and the argument that consumers/markets will discipline networks that choose to discriminate, I do not fully address these two premises. So I’ll briefly do so here.

    Regarding the first, my understanding is that the suite of technologies are not so crude and that they have evolved considerably over the past decade and are continuing to do so; moreover, crude technologies can be a significant problem, unless consumers notice and act as you predict they will, which brings me to the second premise. I do believe that in this particular context, consumers are more appreciative of the benefits from openness. But that appreciation may not be sufficient to discipline discriminating networks for two reasons. First are the demand-side failures discussed at length in the book. I actually agree with you that private benefits and public spillovers are often deeply connected, but one of the points of the book is to show how many of the relevant spillovers from public and social goods spill off-network and affect people besides consumers. Even in an environment where infrastructure consumers (users) appreciate spillovers from public and social goods produced by other infrastructure consumers (users), those consumers’ willingness to pay in the infrastructure market still may fall well short of social demand because of the many spillovers that flow off-network. Basically, consumer demand for “open infrastructure” is still derived demand and resistance to network discrimination reflected in consumers’ willingness to pay for open infrastructure may not be enough. It might have been in the 1990s, might be (for some time), or it might not be, but as I argue in the book, “there is too much at stake to bet on private strategy coinciding with public strategy” or for purposes of this discussion we might rephrase it as “there is too much at stake to bet on private demand coinciding with social demand.”

    Second, I am simply not as confident as you that consumers will behave as you predict. They may notice and react to certain losses of “compelling content and applications” but not others; or they might not react at all; plus, those applications most likely to garner a reaction are probably less likely to be deprioritized. [I feel like there is more to be said here, but the comment is getting unwieldy.]

    Finally, I should note that I also support pursuing policies that preserve and enhance competition. The argument I make in the book is that competition does not alleviate the demand side market failures and consequently, the case for network neutrality remains strong even if we (heroically) assume robust competitive markets.