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Net Neutrality – “You Shall Not Pass!”

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By: Luis A. Velez, The IP Trend™ Blog

Achieving net neutrality could provide the Internet business environment with a just balance. Creators, investors and consumers could rely more on a public policy system that impartially regulates the Internet. It will promote free competition subject to equal resources.

The Federal Communications Commission (FCC) could regulate the price transparency and the Internet Service Providers’ (ISPs) performance. It could also regulate the ISPs limitations on network access and prevent its discriminatory charges to certain services.[1]

According to Lawrence Lessig, in his conference “Neutral Networks Work”, the Government’s authority to regulate has limited jurisdiction.[2] The scope of the FCC’s authority could extend to contractual relations.[3] Regulating contractual relations could also have a negative impact on principles such as the “freedom of contract” between private parties. However, having an impartial entity (i.e. quasi-judicial entity) that prevents unconscionable Internet contractual relations could help establish a regulatory system model in benefit of ISPs and users.[4]

Lessig suggested some interesting approaches, like the zero discriminatory surcharge (ZDS).[5] It follows that the incentive resulting from using ISPs should not be used to inflate prices.[6] The discriminatory behavior presented by some ISPs leads to scarcity of options and inflated charges to companies consuming greater amounts of bandwidth.[7] Companies should not be thwarted from entering the Internet market. The intention behind the ZDS is to prevent the extra charge on companies that use more bandwidth but offer the same services as those that are not been extra charged. If there is an extra charge for bandwidth consumption, it will create a barrier for those companies (specifically Start-ups) with limited capital. It will also prevent those companies from competing with big companies that can afford greater bandwidth capacity.

Kenneth Laudon and Jane Laudon provided an interesting insight on how the Internet could also be compared to other utility services.[8] Major cities have adopted congestion charges on utilities.[9] For example, in some cities vehicles have to pay a toll to gain entrance to the center of the city.[10] Others have used a congestion charge to regulate the higher demand on the use of electricity.[11] Recently, the President of the United States suggested classifying broadband as utility under Title II, hoping to stop ISPs, advertisers, and big corporations from entering monetary deals leading to potential unfair advantage.[12] His statement established some basic principles: ISPs should not block anyone from accessing legal content, ISPs should not frustrate Internet speed (i.e. slow access because they do not pay extra charges to ISPs) affecting some companies while offering “fast lanes” to others, and ISPs should be impartial in their treatment to intermediary service providers.[13] “There are no gatekeepers deciding which sites you get to access, there are no toll roads on the information super-highway.”[14]

The Internet promotes competition and provides an array of services. Having gatekeepers or tolls as a hurdle to access the Internet and requiring payment for its congestion or traffic could create unreasonable price fixing affecting the basic principles mentioned above. I understand that Internet services depend highly on the user demand, but demand should not be manipulated by ISPs. The nature of the Internet relies on the flow of information, its access and the users who access the information. If we continue to permit the unreasonable manipulation of prices as a requirement for users to access the Internet, then the Internet principles and the users’ freedom to decide would be compromised.

“Innovation should be measured by the ability to create, not by the ability to pay.” © -Luis Antonio Velez-

[1] See Lawrence Lessig, Neutral Networks Work, YouTube (April 17, 2008) http://www.youtube.com/watch?v=_mYbYG-nXVA

[2] See id.

[3] See id.

[4] See id.

[5] See id.

[6] See id.

[7] Bandwith refers to “the volume of information per unit of time that a transmission medium (i.e. Internet connection) can handle.” Tim Fisher, Bandwidth, About.com http://pcsupport.about.com/od/termsb/g/bandwidth.htm. See also Alan Simpson, What is Bandwidth?, CoolNerds http://www.coolnerds.com/Newbies/Bandwidth/Bandwidth.htm.

[8] See Kenneth C. Laudon & Jane P. Laudon, Management Information Systems: Managing the Digital Firm, Case 1 (Pearson Education 2009).

[9] See id.

[10] See id.

[11] See id.

[12] See United States President Barack Obama, President Obama’s Statement on Keeping the Internet Open and Free, YouTube (Nov. 10, 2014) https://www.youtube.com/watch?v=uKcjQPVwfDk#t=17. See also Matt Clark, President Obama Wants Broadband Treated as a Utility, IGN (Nov. 10, 2014) http://www.ign.com/articles/2014/11/10/president-obama-wants-broadband-treated-as-a-utility

[13] See id.

[14] United States President Barack Obama, supra note 12.


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