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Network Neutrality Rules
for a Digital Economy
Barbara van Schewick
Professor of Law and (by Courtesy) Electrical Engineering,
Stanford University
@vanschewick
11th International CRC Workshop on Regulation
August 29, 2016
I. Background
II. Criteria for Evaluating Net Neutrality Rules
III. Rules
IV. Zero-rating
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I. Background
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What is network neutrality?
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Original Internet
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Network is application-blind
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Network can’t control
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Users decide
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Today network can control
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Network neutrality rules
limit network providers‘ ability to interfere
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I. Background
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II. Criteria for Evaluating Net Neutrality Rules
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Factors
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Story 1
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Architecture
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The End-to-End Arguments
(Broad Version)
Network to provide only general services
of broad utility across applications
Network not optimized in favor of specific applications
All application-specific functionality at end hosts
Two versions
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The End-to-End Arguments
(Broad Version)
Network to provide only general services
of broad utility across applications
Network not optimized in favor of specific applications
All application-specific functionality at end hosts
Network is general
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Innovators decide independently
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Network is general
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Users decide independently
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Low cost of innovation
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Many different people can innovate
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Innovation without permission
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Innovation without permission
User Choice
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Innovation without permission
User Choice
Low costs of innovation,
very large and diverse group of innovators
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Story 2
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Architecture
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The End-to-End Arguments
Broad Version
Network only general services of broad utility across
applications
Network not optimized in favor of specific applications
All application-specific functionality at end hosts
Consequence: Network is application-blind
Network is application-blind
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Network can’t control
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Today network can control
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Increase profits
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Unwanted content
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Manage bandwidth
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Network can control.
Innovators don’t innovate.
Investors don’t invest.
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Users decide
vs.
Network providers decide
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The Impact of Changes
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Market?
€$
€ $€$
Potential Innovator
Benefits > Costs?
Yes:
InnovateNo:
Do not Innovate
Economic Theory
CostsBenefits
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Market?
€$
€ $€$
Potential Innovator
Benefits > Costs?
Yes:
InnovateNo:
Do not Innovate
Economic Theory
CostsBenefits
Many different innovators decide.
User decide.
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More and more diverse
vs.
Fewer and less diverse
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Under uncertainty or user heterogeneity
More and better innovation
that better meets user needs
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More and more diverse innovators
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More and more diverse ideas
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More ideas realized
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Less and less diverse innovators
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Less ideas realized
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Widespread experimentation
Large, diverse group of innovators
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Users decide
vs.
Network providers decide
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Innovation without permission
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Innovation without permission
User choice
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Innovation without permission
User choice
Network can’t control
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Innovation without permission
User choice
Application-blindness
Low costs of innovation,
very large and diverse group of innovators
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III. Rules
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Blocking
Discrimination
Limits on Charging Application Providers
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Blocking
Discrimination
Limits on Charging Application Providers
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Blocking
Discrimination
Limits on Charging Application Providers
No discrimination
Between applications and classes of applications
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Netflix & YouTube vs. XFinityTV.com
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Internet telephony vs. Online video
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No discrimination
Between applications and classes of applications
Allow application-agnostic discrimination
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Exception:
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Reasonable network management
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Targeted, tailored
As application-agnostic as possible
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Blocking
Discrimination
Limits on Charging Application Providers
Limits on Charging
* for access to users
* for preferential treatment
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No discrimination based on provider payments
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Innovation and economic growth
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All sectors of the economy
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Democracy and culture
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Collateral damage
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The devil is in the details
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Network Neutrality and Quality of Service
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IV. Zero-rating
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Zero-rating
Exempting applications from data caps
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How to think about zero-rating?
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makes zero-rated apps more attractive
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makes zero-rated apps more attractive
powerful tool to favor some apps over others
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makes zero-rated apps more attractive
powerful tool to favor some apps over others
same problems as technical discrimination
data
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powerful impact on user behavior
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users strongly prefer zero-rated content
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zero-rating directly limits user choice
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unlimited video
vs.
9 min per day
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four forms of zero-rating
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zero-rating for a fee
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zero-rating for a fee
zero-rating some apps, but not similar apps
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zero-rating for a fee
zero-rating some apps, but not similar apps
zero-rating all apps in a class
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zero-rating for a fee
zero-rating some apps, but not similar apps
zero-rating all apps in a class
application-agnostic zero-rating
zero-rating for a fee
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zero-rating for a fee
same problems as fast lanes
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zero-rating some apps, but not similar apps
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zero-rating some apps, but not similar apps
(no fee)
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zero-rating some apps, but not similar apps
(no fee)
same problems as speeding up some apps
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zero-rating all apps in a class
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zero-rating all apps in a class
(no fee)
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slippery slope
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environment for innovation
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who gets to chose
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harm to consumers
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application-agnostic zero-rating
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application-agnostic zero-rating
(no fee)
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More:
@vanschewick
http://cyberlaw.stanford.edu/about/people/barbara-van-schewick
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Interconnection with last-mile networks
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Is this a network neutrality problem?
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