Does the policy of “network neutrality” or NN really make any economic sense? Does NN not lead to a tragedy of the broadband commons?
Consider the Google Fiber project in Kansas City, Missouri. For Google Fiber to work, Google needs to distinguish and price discriminate between (i) ordinary or “low-capacity” users, who move lower volumes of data through the network, and (ii) commercial or “high-capacity” users, who run greater volumes of data through the network.
But many smart people don’t understand this problem. Consider, for example, the opening lines of this recent report: “When Google was just a mighty search engine, the company championed an open, unfettered Internet. Now that it’s selling ultra-fast broadband Internet and TV service in Kansas City, Mo., with plans to repeat the service elsewhere, the tech giant bars customers from hosting servers on the Google Fiber network without written permission.”
But if ordinary consumers want to have access to Google Fiber at one low price, Google has to make this distinction between regular and commercial uses of the network and enforce this rule.
prior probability 