The Economics of Network Neutrality Are “ prophylactic ” remedies to nonproblems needed ?

| Winter 2011-2012 S ince “network neutrality” first appeared in policy debates, its meaning has been less than crystal clear. Some advocates have argued that net neutrality demands that broadband Internet service providers (ISPs) treat all bits equally: “a bit is a bit is a bit,” while others make exceptions for malware bits, spam bits, child pornography bits, etc. Some advocates have argued that net neutrality must apply not only to wired broadband ISPs, but to wireless broadband providers as well, while others recognize that wireless broadband has a unique technological structure that requires more stringent and flexible capacity management than is consistent with “a bit is a bit is a bit.” The Federal Communications Commission has recently issued a Report and Order (R&O) promulgating its network neutrality rules. As might be expected, the R&O strikes a middle ground between purists on each side of the debate. (Curiously, the FCC itself seems to have foresworn the use of the term “network neutrality,” preferring to adopt phrases such as “preserving the Open Internet” and “Open Internet rules.” In this article, I continue to use the traditional terminology.) In this article, I describe the FCC’s recently enacted regulation on network neutrality and then I ask three questions: