Getting a Fix on Network Neutrality

The Wharton School convened a panel of experts to analyze network neutrality regulations. Here’s a summary of their findings:

Network neutrality became a hot issue last fall when top executives at AT&T and BellSouth noted that companies like Google, Yahoo and Vonage were essentially distributing their services for free on the backs of telecommunications companies. “For a Google or a Yahoo or a Vonage, or anybody, to expect to use these pipes for free is nuts,” said Ed Whitacre, chairman of AT&T, in November.

That comment set off a heated argument on the issue that became “even more crazy than most debates in Congress,” says Gerald Faulhaber, a Wharton professor of business and public policy. Indeed, on the eve of the June 8 vote, Internet giants were lobbying intensely for the amendment, with Google CEO Eric Schmidt urging users in an undated open letter to “take action to protect Internet freedom.”

Faulhaber convened a meeting of scholars — including David Farber, a computer science professor at Carnegie Mellon, Christopher Yoo, a Vanderbilt law professor, and Michael Katz, an economics professor at the University of California Berkeley’s Haas School of Business — to consider the issue. The group concluded that mandating network neutrality could have adverse effects on Internet development and result in unforeseen consequences. Any legislation “is a problem when the Internet is in a state of flux,” says Faulhaber.

I don’t agree with all of their facts, but their conclusion is certainly correct: this is not the time to impose new regulations on broadband providers. Regardless of how we assess the potential dangers of a smarter Internet, it’s way too early to know how to regulate it.