Picker MobBlog: Network Neutrality Redux

June 29, 2005

Network Neutrality Redux

Despite Randy's call for Tim and Jim, let me add my two cents. First, I think Jim is right to note that the law of unintended consequences is something to be wary of. There were very good reasons for and very good consumer benefits that came from the anti-tying rule that promoted competition for equipment that connected to the telecommunications network. In the case of a broadband network neutrality rule, however, its advocates have not met (at least by my lights) the challenge of explaining--based on the complex economics I referred to previously--why a categorical rule providing an attachment right is appropriate.

Second, even without the case for a categorical rule, I agree with Tim that a standard presuming an attachment right (or an interoperability right, as it were) is appropriate. The benefits of a more contingent right, which could be evaluated on a case-by-case basis with an eye to whether a legitimate business justification explained the restriction, is that it allows for dynamism and consumer benefits that might arise only from vertical integration. To date, however, the FCC has not shown the institutional fortitude for such approaches so whether it will in the future raises a challenging institutional question.

And since Randy and Jim mentioned Trinko, it is fair to state that its thumb on the scale against antitrust courts and in favor of regulatory agencies will look increasingly questionable if the FCC (and other agencies) do not develop the competence (or have the legal authority) to address antitrust-type matters effectively. I noted before that Posner's concerns about antitrust courts intervening in high technology markets is on the mark; even in light of these concerns, however, I remain concerned about policies that call for deference to regulatory agencies that may be asleep at the switch (like the FCC was during the Bell System's parade of horribles) or to technologists who are developing products with plausible (as opposed to actual) efficiencies. With that, I will sign off and get back to my work-in-progress on this theme before Randy amends his caution about "you can write or you can read, but not do both" to "you can write or you can blog . . . (except if you are Tim Wu)."

Posted by Phil Weiser on June 29, 2005 at 04:36 PM in Grokster/Brand X | Permalink

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June 29, 2005

Network Neutrality Redux

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