Chris Marsden, passionate defender of net neutrality, bemoaned last week that the European ‘competitive ISP model’ – much cherished by Ofcom, Ed Vaizey and others – is illusory. As he says, even if you don’t like your ISP’s traffic management policies, and choose to switch provider, “you'll still be dealing with the underlying cable-telco duopoly…”
Chris is right, of course, but the focus on network infrastructure is overdue. One of the weaknesses of much net neutrality rhetoric is that it has focused on the wrong competitive problem, i.e. it is aimed at preserving competition in applications and content, sections of the industry that are already highly competitive and the least protected by entry barriers (and likely to remain that way). Arguably, the real focus should instead be on the impact network neutrality regulation would have on the competitiveness of the broadband access market. In this context, academics such as Professor Christopher Yoo have concluded that mandating network neutrality can have the perverse effect of reinforcing sources of market failure by frustrating the introduction of differentiation in the access market, thereby restricting networks to competing on the basis of price and network size, factors that favour the existing providers.
Pete
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