A “Third Way” on Network Neutrality

Over the last several months, the debate over "network neutrality" has taken an unfortunate turn on Capitol Hill. The current legislative landscape, reflecting the polarized state of debate, largely focuses on more extreme approaches to the issue. We believe that the current state of the network neutrality debate, like many polarized issues, denies the reasonable concerns articulated by each side and obscures the contours of a sensible solution. In this paper, we outline both the reasonable concerns of each side in the debate with respect to the future of the Internet, as well as the claims made by each side that we believe are not factually correct or economically supportable.

We also propose a three-part, "third-way" solution:

• Congress should require broadband providers to state their broadband access and usage policies in clear terms. These terms should specify the level of bandwidth, amount of latency (delay), and any limitations on the ability of consumers to access the content or services of their choice. In addition, any firm selling "broadband Internet access" must make available a basic and growing level of open, unmanaged Internet access. Firms that do not meet this FCC-defined requirement would be prohibited from calling any of their services "broadband."
• In order to ensure that broadband providers do not abuse their market power, Congress should charge the FCC with the responsibility of overseeing the use of discriminatory access arrangements to make sure that any such arrangements do not harm competition (and consumers).
• Congress should provide financial incentives to companies investing in broadband networks (allowing first-year expensing of broadband investments and exempting broadband services from federal, state, and local taxation), but only if broadband providers provide a best-efforts, open Internet data pipe to their customers with average speeds at least as fast as the evolving FCC definition.