Network Neutrality Cyberlaw Wiki Post

For my most recent wiki post, I reacted to a reading in our casebook in which Tim Wu and Christopher Yoo debated over network neutrality. Here is what I came up with-

To a certain extent, I felt that sometimes Christopher Yoo and Tim Wu were arguing non sutto voce, when there was room for common ground. All one needs to understand is that Yoo and Wu were debating about different types of network discrimination. The two types of network discrimination are blocking and access tiering, which can be further subdivided into Most Favored Nations discrimination and efficiency-maximizing discrimination. For purposes of clarifying my own understanding, I want to set out definitions for each of the types of discrimination. Blocking occurs when a network prevents a service from being carried over it that would compete with the services that it is offering. The example utilized by Wu is when a network blocks VoIP because it compete with its telephone service. Most Favored Nations discrimination is a less extreme form of blocking in that it discriminates against competitors by slowing their service down rather than stopping it completely. Efficiency-maximizing discrimination occurs when a network prioritizes the data being delivered. The example discussed by Yoo is having three networks coexisting—one that delivers time sensitive data such as streaming media and VoIP, a second that helps security measures, and a third route that is relegated to traditional Internet content such as email.

When broken up into these categories, it seems pretty clear that efficiency maximizing discrimination should be permitted, whereas blocking and Most Favored Nations discrimination should not be. Assuming that we lived in an ideal world where lobbying didn’t drive political outcomes, we could judge the value of each category by its impact on consumers. Efficiency-maximizing discrimination is clearly beneficial because as laid out by Yoo, it doesn’t seem to have any negative effects, but rather benefits everyone. It doesn’t interfere with people getting their email, and it permits them to watch video without hesitation and conduct phone conversations online more easily. This appears to be a clear case of Pareto efficiency, because no one is harmed and everyone is helped. In regards to blocking, I don’t see who is helped outside of the network providers. Consumers clearly would be benefited by the ability to choose a cheap, effective program like Skype rather than being restricted to choosing a land line. New technologies and services should be tested on their utility to consumers, rather than having their fates decided because they compete with network providers’ own goods. The same conclusion is met when considering the practice of Most Favored Nations discrimination, though the circumstances are less egregious. Most Favored Nations discrimination would result in behind-the-scenes jockeying for the best deal with the best network provider. I can’t help but think that in the end this would result in higher transaction costs as consumers would end up having to make their choice of network provider dependent on not just the price, but also the innumerable services that they offered.

While I don’t feel that the government should be doing the networks’ job for them, I think it should be understood that the networks serve a higher purpose, and as such have to understand that the greater good will be valued over their desire to maximize profits. While engaging in Most Favored Nations discrimination and blocking might favor their bottom line, I fail to see how it will really help consumers, considering it is an anti-competitive action. If legislation could be crafted that clearly delineates which types of discrimination are permitted and which aren’t along these lines, then I think the dispute could be resolved fairly easily.

I am still mulling over whether or not I came to the right result in relation to Most Favored Nations discrimination. In another writing, Wu analogized it to how KFC carries only Pepsi products, whereas McDonald's carries Coke. Different networks could offer different VoIP products and different video services. I guess my objection to this type of discrimination is that the choice is made by the networks rather than the consumers.