Managing the (Traffic) Managers

1. Managing the (Traffic) Managers TECHNICAL, ECONOMIC AND LEGAL ISSUES AROUND NET NEUTRALITY

2. Introduction • Technical Issues: Managing Capacity • Economic Interests: Managing Interests and Externalities • Legal Issues: Managing Fairness • Political Issues: Managing Freedoms • No solutions, only questions!

3. How to manage internet traffic in a way that is economically efficient, legally justifiable, and respects human rights?

4. Technical Issues: Managing Capacity • New services and digital convergence • But the same old wires and connections • The long-term solution – more innovation, better infrastructure • But in the short term, traffic is managed… but how? • By volume? • By application? • By IP address? • And for what motivation?

5. or… Sources: Wikimedia Commons: https://en.wikipedia.org/wiki/The_Traffic_Policeman Monty Python Wikia: http://montypython.wikia.com/wiki/File:Bridge_of_Death_monty_python_and_the_holy_grail_591679_800_4411271399897.jpg

6. Economic Issues (1/3): Managing Interests and Externalities The Virtuous Circle: • Better content and services… • … over better networks… • … lead to more demand… • … and so more investment and competition • (and/or the other way around) Source: OECD

7. Economic Issues (2/3): Managing Interests and Externalities • Consumers want to: • Get value for money (Closed garden? Open prairie?) • Risk of abuse? • Established Content Producers want to: • Maximise revenue – optimise customer base • Minimising costs – avoid additional payments • Potentially do deals? • New/Non-Commercial Players want to: • Maximise reach • Free access a ‘subsidy for creativity’ • Shared interest in high quality, low cost connection

8. Economic Issues (3/3): Managing Interests and Externalities • For ISPs, a long term interest in better content, and loyal paying customers • But investment is uncertain • In the short-term: • Need to recoup costs of investment, reward shareholders (and invest), so… • Find efficiencies through traffic-shaping • Seek money from other ISPs? • Seek money from content providers? • Seek money from consumers?

9. Legal Issues: Managing Fairness • One Gatekeeper or Many? • Competition – promote consumer welfare, now and tomorrow • Can consumers switch? • Costs? • Transparency vs confusopoly? • Lower barriers to entry? • But if not • Enforcing quality of service • Enforcing net neutrality

10. Political Issues:Managing Freedoms? • Not just any type of telecoms network • Universal • Non-commercial origin • A human right? • Privacy implications • Fears of reversing freedom of expression and access to information gains?

11. Sources • Lee, Robin S. and Wu, T. (2009), Subsidizing Creativity through Network Design: Zero Pricing and Net Neutrality, Journal of Economic Perspectives (Vol. 23, No. 3, Summer 2009), pp 61-76 • OECD (2016), Digital Convergence and Beyond – Innovation, Investment and Competition in Communication Policy and Regulation for the 21st Century – Background Report for 2016 Ministerial Meeting on the Digital Economy • Evans, D. (2011), Net Neutrality Regulation and the Evolution of the Internet Economy, Paper submitted for a hearing by the OECD’s Working Party on Competition and Regulation • Werbach, K. (2013), The Development of Fixed Broadband Networks, OECD Digital Economy Papers No. 239, OECD Publishing • Cave, M. (2011), Competition and Consumer Protection Issues in the Net Neutrality Debate, with Special Reference to Europe, Paper submitted for a hearing by the OECD’s Working Party on Competition and Regulation • Wu, T. (2002), A Proposal for Network Neutrality • Wu, T. (2005), Network Neutrality, Broadband Discrimination, Journal on Telecommunications and High Tech Law (Vol 2) • OECD (2007), Internet Traffic Prioritisation: An Overview, OECD Publishing