The new net neutrality paper from Florida U. is absolutely hilarious:
Whether to legislate to maintain â€œnet neutralityâ€, the current status quo of prohibiting broadband service providers from charging online websites for preferential access to their residential and commercial customers, has become a subject under fierce debate. We develop a stylized game-theoretic model to address two critical issues of the net neutrality: (1) who are gainers and losers of abandoning net neutrality, and (2) will broadband service providers have greater incentive to expand their capacity without net neutrality.
We find that if the principle of net neutrality is abandoned, the broadband service provider definitely stands to gain from the arrangement, as a result of extracting the preferential access fees from the content providers. The content providers are thus left worse off, mirroring the stances of the two sides in the debate. Depending on parameter values in our framework, consumer surplus either does not change or is higher, and in the latter case, while a majority of consumers are better off, a minority of them is left worse off with larger wait times to access their preferred content. The social welfare increases when compared to the baseline case under net neutrality when one content provider pays for preferential treatment, but remains unchanged when both content providers pay. We also find that the incentive for the broadband service provider to expand under net neutrality is unambiguously higher than under the no net neutrality regime. This goes against the assertion of the broadband service providers that under net neutrality, they have limited incentive to expand.
Aside from their use of pidgin English (“the current status quo of prohibiting…from charging”, “critical issues of the net neutrality,” “has become a subject under fierce debate,” “a majority are better off, a minority is worse off”) the authors embarrass themselves with a wholly nonsensical definition of the terms of the debate. As Scott Cleland points out, if net neutrality really were the status quo, legislation would not be needed simply to preserve it.
In fact, net neutrality legislation seeks to create a new status quo where light users of Internet subscription services are required to subsidize heavy users, and where telecommunications companies would be prohibited from offering non-Internet-based IPTV services unless competitors could access their private IPTV facilities for free (where “free” means for no additional charge beyond what they pay for Internet service today.)
Verizon and AT&T offer IPTV services today, so this is clearly not a question of preserving the status quo.
The professors jump through hoops in order to “prove” that light users should be required to subsidize heavy users, and then baldly assert that the only difference between 10 Megabit Ethernet on fiber (10Base-FL [sic]) and Gigabit Ethernet is at the transceiver level. No dudes, not even close: system interfaces, buses, and MAC controllers have to be re-engineered to run faster, and distances suffer.