WASHINGTON, D.C. – Regulating broadband network neutrality could result in Internet service provider monopolies, a U.S. think tank warns.
Public policy debate urging governments to prevent anticompetitive behaviour by preserving open Internet access by consumers to third-party services would end up “commoditizing” broadband services, according to a study released today by the Washington-based Phoenix Center. Policy-mandated bandwidth commoditization “is likely to deter facilities-based competition, reduce the expansion and deployment of advanced communications networks, and increase prices,” the report says.
“Network neutrality policies present a trade-off. We do not take a position in the paper on the propriety of network neutrality rules,” says study co-author George S. Ford, Phoenix Center Chief Economist. “But our model shows that proposals which would make it difficult, if not impossible, for network firms to differentiate their products may reduce the chances of entry and competition. Our model also suggests that even in the absence of anticompetitive conduct, network neutrality rules are not costless, because they can adversely effect competition.”
The full paper is accessible here.
