This is a writeup of a shallow investigation, a brief look at an area that we use to decide how to prioritize further research.
In a nutshell
What is the problem?
There are a number of questions about how broadband internet providers should be regulated. U.S. consumers appear to pay more for slower internet access than European consumers partially because of a lack of regulation, and regulators are currently deciding whether and how to implement “network neutrality” rules that would prevent providers from discriminating between different types of traffic.
What are possible interventions?
The Federal Communications Commission (FCC) appears to have the authority to implement regulations to enforce network neutrality and open access to broadband networks. A funder could support a variety of advocacy or research efforts to encourage effective regulations.
Who else is working on it?
A number of nonprofits and major technology companies are advocating for the FCC to adopt regulations requiring network neutrality, and a smaller set of groups are advocating for regulation to address cost issues.
1. What is the problem?
We decided to look into the topic of broadband policy because of claims that:
- Consumers in the U.S. typically pay more for slower access to broadband internet than in other countries.1
- Network neutrality regulations (which prevent providers from discriminating between different types of network traffic), currently being discussed, are important for preserving the openness and vibrancy of the internet.2
Because broadband is a natural monopoly, it is plausible that a lack of regulation might lead to poor service and high prices.3 The Federal Communications Commission (FCC) does not publish enough data on broadband pricing to estimate a mean price paid by all American consumers, but estimates by the New America Foundation’s Open Technology Institute suggest that U.S. broadband subscribers pay roughly $15/month more than European broadband subscribers, though with significant variability.4 Under the somewhat heroic assumption that these costs are accurately estimated,5 reaching cost parity with Europe (which may not be possible) would shift around $15 billion/year from broadband companies to consumers.6 It is difficult to estimate the deadweight loss from natural monopoly pricing, and we have not seen any estimates of those costs for broadband services in the U.S.
The humanitarian importance of network neutrality regulations is also difficult to ascertain. To the extent that an unregulated internet architecture would impair the conditions that made the internet so successful in the first place, the issue could be quite important. However, it is not clear to what extent neutral networks are necessary to maintain the value of the internet or to what extent regulations are required to preserve neutral networks. Network neutrality violations have historically been rare even when they appear to have been legally permissible (which seems to have been for much of the history of the internet).7
2. What are possible interventions?
There are a number of policy options available to address both broadband cost issues and network neutrality. Most notably, the FCC could reclassify broadband as a “telecommunications service,” which would grant it the legal authority to enforce net neutrality rules by regulating internet service providers as common carriers and to enforce open access provisions (which are said to lower broadband costs in other countries).8 The FCC is currently considering reclassification, along with other policy options.9
Other policy options might include:
- The FCC could propose some other form of network neutrality regulation.
- The FCC could force “the nineteen states that currently limit or ban municipalities from building local networks” to lift their restrictions on local infrastructure investment.10
- Municipalities could build open access local broadband networks to compete with private providers.11
A funder interested in promoting any of these policies might support advocacy or research organizations working in the field. We do not have a sense of which advocacy activities might be most helpful or how cost-effective they might be.
3. Who else is working on this?
A number of constituencies are advocating in favor of network neutrality regulations:12
- Public interest technology and communications groups, including Free Press, Public Knowledge, the Center for Democracy and Technology, New America Foundation’s Open Technology Institute, the Benton Foundation, and the Electronic Frontier Foundation. A number of other advocacy groups have signed onto an open letter supporting net neutrality regulations.13
- Community-focused institutions, including the Schools, Health, and Libraries Broadband Coalition and the American Library Association
- Consumer protection groups, including the Consumers Union and the Consumer Federation of America.
- Groups focused on social justice in the media, such as the National Hispanic Media Coalition and the Media Action Grassroots Network.
- Foundations, including the Ford Foundation and the Knight Foundation.
- Former FCC commissioner Michael Copps, who now serves as Special Advisor to the Media and Democracy Reform Initiative at Common Cause.
Though the most frequent mentions of “network neutrality” in lobbying disclosure reports have been by major telecommunications providers and trade associations that oppose net neutrality, a number of major technology companies (such as Amazon, Facebook, Google, Microsoft, Netflix, and Twitter) have also lobbied for and support net neutrality regulations.14
4. Questions for further investigation
Our research in this area has been relatively limited, and many important questions remain unanswered by our investigation.
Amongst other topics, further research on this cause might address:
- How likely and how harmful are network neutrality abuses likely to be in the absence of regulation?
- What degree of resources are for-profit and non-profit advocates for net neutrality and open access policies (which are designed to increase competition and reduce costs) devoting to the issue? Are there important gaps in the advocacy infrastructure on either issue?
- What does the landscape for municipal broadband efforts look like? What are the benefits and costs of open access municipal networks?
5. Our process
We rely heavily on a conversation with Patrick Lucey and Danielle Kehl of the New America Foundation’s Open Technology Institute.
|Lee 2014||Source (archive)|
|Leichtman Research Group 2014||Source (archive)|
|Open Technology Institute 2013||Source (archive)|
|Notes from a conversation with Patrick Lucey and Danielle Kehl on March 19, 2014||Source|
|Organizations Supporting Net Neutrality May 2014||Source (archive)|
|Furnas and Drutman 2014||Source (archive)|
|Engine 2014||Source (archive)|