The Fallacy of Net Neutrality

There is little dispute that the Internet should continue as an open platform,” notes the Federal Communications Commission. Yet in a curious twist of logic, the FCC has moved to upend the rules yielding that outcome, imposing network neutrality” regulations on broadband-access providers. The new mandates purport to prevent Internet gatekeepers” by prohibiting networks from favoring certain applications.

In this comprehensive Broadside, Thomas W. Hazlett explains the faulty economic logic behind the FCC’s regulations. The open Internet”thriving without such mandatesallows consumers, investors, and entrepreneurs to choose the best platforms and products, testing rival business models. Networks are actively (and efficiently) involved in managing traffic and promoting popular applications, making the entire ecosystem more valuable. This is a spontaneous market process, not a planned structure, and the commission’s restrictions threaten to stifle innovation and economic growth.

Thomas W. Hazlett is Professor of Law & Economics at George Mason University, where he also serves as Director of the Information Economy Project. He previously taught at the University of California, Davis and the Wharton School, and is a columnist for the Financial Times. Professor Hazlett has also written for the Wall Street Journal, New York Times, Slate, Barron’s, The Economist, The New Republic, and The Weekly Standard, while publishing academic research in the RAND Journal of Economics, Journal of Law & Economics, Journal of Financial Economics, Journal of Economic Perspectives, University of Pennsylvania Law Review and the Columbia Law Review. In 1991-92 he served as Chief Economist of the Federal Communications Commission.