The likely harm to consumers and the Internet economy if Congress abandons “Network Neutrality” will be substantial, according to a new economic analysis released today by Consumers Union, Consumer Federation of America and Free Press.

The report rebuts the claims of Net Neutrality opponents such as Vanderbilt University Law Professor Christopher S. Yoo and the Phoenix Center for Advanced Legal & Economic Public Policy Studies. It disputes their facts and concludes that the consumer benefits claimed for abandoning this principle of open communications are non-existent.

“The proponents of network discrimination get the policy problem exactly backward,” said Mark Cooper, director of research for the Consumer Federation of America. “They say we should not risk imposing Network Neutrality for fear of stifling competition and innovation. Yet it is Network Neutrality that has given us vibrant competition and innovation. The question Congress should be asking is why abandon network neutrality and risk destroying the Internet?”

“Since network neutrality has succeeded so dramatically in producing the vibrant Internet economy and sustaining competitive communications services,” said Trevor Roycroft, the economist who authored the report, “critics must show very tangible benefits from changing that policy.”

The report argues that Yoo and the Phoenix Center have reached conclusions based on faulty assumptions that do not fit the realities of the Internet marketplace.

At the foundation of the debate is a dispute as to whether or not the telephone and cable companies that control last-mile broadband access should be allowed to “differentiate their product.” Network differentiation is code for strategic manipulation of technology that will enable discrimination “that adversely affects the utilization and production of Internet content,services, and applications,” the report argues.

The report gives ample evidence that a policy of content discrimination will result in “a patently inferior outcome that will favor incumbent last-mile broadband providers to the detriment of consumers and Internet innovators.” Companies like AT&T, Veizon and Comcast currently possess enough market power and dominance to turn the open Internet into their private domains, which would “undermine the vibrant competition and rapid innovation in the provision of Internet content, applications and services, which has characterized the Internet since its privatization in 1995.”

Net Neutrality is the safeguard that preserves competition and innovation and not the alternative. The three groups submitted the report to the Senate Committee on Commerce, Science and Transportation in advance of its latest hearing on major telecommunications legislation.

This entry was posted on Tuesday, June 13th, 2006 at 10:07 am and is filed under Uncategorized.-->