The Antitrust Review of the Americas 2009

The Two Faces of the Internet: Untangling Net Neutrality

01 January 2009

There are two faces to the internet, a dichotomy exposed by the net neutrality debate. One is the internet content market - which as a general matter is highly competitive with low barriers to entry and numerous, diffuse participants. The other is the market for high-speed internet service - which some characterise as highly concentrated with considerable barriers to entry. The difference between these two interrelated markets motivates the movement for net neutrality regulation. Its advocates worry that unless prevented by law, the internet service providers (ISPs) will project their market power into the internet content market, stifling broad-based competition and with it innovation valuable to society at large. Emerging technology has given access providers the means to ban or discriminate against content moving along their networks, although the same technology also has the possibility of improving the quality of internet service to consumers. This article describes the net neutrality debate, providing the necessary background and then addressing the most convincing arguments on either side, with special attention to the economic incentives of the actors and the effects on competition.

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