The Difficulty with Regulating Network Neutrality

Abstract

Network neutrality is, and has been, an essential design element of the Internet. Increasingly, there has been pressure to move from a neutral network to a network that is optimized for particular functions (such as video streaming), and technology has responded to that call through the creation of a powerful technology called Deep-Packet Inspection. DPI allows access providers to directly violate the neutrality principle because it provides a mechanism for unequal treatment of content. The tension between network neutrality and DPI is significant – so much so that the Federal Communications Commission (“FCC”) has intervened.

The FCC recently published its final Report and Order for Preserving the Open Internet in the Federal Register, which establishes a general principle that neutrality should be safeguarded. Despite this safeguard, the FCC provided for a reasonable network management exception to neutrality, which allows access providers to treat content unequally if the provider is reasonably managing its network. The reasonable network management exception is a broad exception. However, a broad exception, potentially overbroad, may not be the most prudent form for regulating network neutrality.

To determine what form is appropriate for network neutrality regulation, one should engage in a rules-versus-standards analysis specifically in this context. There is no obvious choice, but context can provide useful background when determining whether to regulate with rules or standards.

Network neutrality regulation should be written as a rule, not a standard. Establishing a rule-like regulation will deter non-neutral behavior by access providers, and will preserve the Internet’s neutral architecture and the benefits that equal treatment of content provides. In addition, rule-like regulations reduce the burden placed on enforcers, typically users, of the regulation. For these reasons, the reasonable network management exception should also be worded like a rule; those arguing for a broad, standard-like exception have not successfully demonstrated why a broad exception is required.

Keywords: Network neutrality, open internet, FCC, Federal Communications Commission, rules versus standards, deep packet inspection, error costs, false positives, false negatives, spillovers, positive externalities