The next frontier for network neutrality

Administrative Law Review

Volumn 60, Issue 2, 2008, Pages 273-322

  Weiser, Philip J ^a,b  

^a UNIVERSITY OF COLORADO   (United States)

^b Silicon Flatirons Telecommunications Program   (United States)

Author keywords

[No Author keywords available]

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EID: 70350465214     PISSN: 00018368     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Review

References (224)

1. See North American Homes Rate Broadband As Key Wireline Service, IQ ONLINE, Oct. 27, 2006, http://www.arm.com/iqonline/news/marketnews/15168.html.
2. As one observer put it, "The subject of Net Neutrality has become so politicized that it's almost impossible to have a rational debate on the subject." Posting of George Ou to RealWorldIT, A Rational Debate on Net Neutrality, ZDNET, http://blogs.zdnet.com/ Ou/?p=512 (June 4, 2007, 5:40 EST) [hereinafter Ou, A Rational Debate].
3. Broadband Industry Practices, Notice of Inquiry, 22 F.C.C.R. 7894 (2007), available at http://hraurfoss.fcc.gov/edocs-public/attachmatch/FCC-07-31A1.pdf; Public Notice, Comments Sought on Petition for Declaratory Ruling Regarding Internet Management Policies, WC Docket No. 07-52 (Jan. 14, 2008), available at httpy/hraunfoss.fcc.gov/edocs-public/attachmatch/DA08-92A1.pdf. For the full text of the report, see FED. TRADE COMM'N, BROADBAND CONNECTIVITY COMPETITION POLICY (2007), available at http://www.ftc.gov/reports/broadband/ v070000report.pdf [hereinafter BROADBAND CONNECTIVITY].
4. See BROADBAND CONNECTIVITY, supra note 3.
5. See infra notes 71-80 and accompanying text (discussing how the BitTorrent incident highlighted the need for more transparency in network management so that restrictions are reasonable and consumers are able to make informed choices regarding providers).
6. Editorial, The Verizon Warning, N.Y. TIMES, Oct. 3, 2007, at A24. Following the uproar in this case, a group of public interest groups called for a greater level of regulatory oversight of instant messaging-notably, the imposition of a common carrier obligation to treat all communications on a nondiscriminatory basis
7. . See Public Knowledge et al., PETITION FOR DECLARATORY RULING STATING THAT TEXT MESSAGING AND SHORT CODES ARE TITLE II SERVICES OR ARE TTTLE I SERVICES SUBJECT TO SECTION 202 NONDISCRIMINATION RULES, at ii (Dec. 11, 2007), available at http://www.publicknowledge.org/pdf/text-messagepetition-20071211. pdf (arguing that "[d]iscrimination in providing mobile services" stifles speech, competition, and innovation in contravention of Title I and Title II of the Communications Act).
8. Recognizing this point, one reporter observed that an FCC hearing into the Comcast-BitTorrent matter and the introduction of a bill by Representative Markey "signals a clear revival of a temporarily dormant debate over whether Net neutrality laws are needed." Anne Broache, Comcast vs. BitTorrent to be Focus of FCC Hearing, CNET NEWS.COM, Feb. 22, 2008, http://www.news.com/Comcast-vs.-BitTorrent-to-be-focus-ofFCC-hearing/ 2100-1028-3-6231737.html.
9. In so doing, it builds upon my previous work in the area. See Broadband Competition Hearings Before the Fed. Trade Comm 'n (2007) (testimony of Philip J. Weiser, Prof, of Law and Telecommunications and Executive Director of the Silicon Flatirons Program, University of Colorado), available at http://www.ftc.gov/opp/workshops/ broadband/presentations/weiser.pdf; Robert D. Atkinson & Philip J. Weiser, A Third Way on Network Neutrality, NEW ATLANTIS, Summer 2006, at 47, available at http://www.thenewatlantis.com/ archive/13/TNA13-AtkinsonWeiser.pdf;
10. Philip J. Weiser, Toward a Next Generation Regulatory Strategy, 35 LOY. U. CHI. L.J. 41 (2003) [hereinafter Weiser, Toward a Next Generation];
11. see also JONATHAN E. NUECHTERLEIN & PHILIP J. WEISER, DIGITAL CROSSROADS: AMERICAN TELECOMMUNICATIONS POLICY IN THE INTERNET AGE (MIT Press 2005);
12. Joseph Farrell & Philip J. Weiser, Modularity, Vertical Integration and Open Access Policies: Towards a Convergence of Antitrust and Regulation in the Internet Age, 17 HARV. J.L. & TECH. 85 (2003).
13. For a sense of the academic debate, see Tim Wu & Christopher Yoo, Debate, Keeping the Internet Neutral?, 59 FED. COMM. L.J. 575 (debating the network neutrality issue and offering up their suggested solutions).
14. Compare Christopher S. Yoo, Would Mandating Broadband Network Neutrality Help or Hurt Competition? A Comment on the End-to-End Debate, 3 J. ON TELECOMM. & HIGH TECH. L. 23 (2004) (offering an economic critique of proposals to mandate that broadband providers adhere to certain principles of network neutrality),
15. with Tim Wu, The Broadband Debate, A User's Guide, 3 J. ON TELECOMM. & HIGH TECH. L. 69 (2004) (concluding that the solution to the network neutrality issue lies with establishing rules that pre-commit both industry and government to open market entry).
16. David D. Clark, Network Neutrality: Words of Power and 800-Pound Gorillas, 1 INT'L J. COMM. 701, 708 (2007), available at http://ijoc.org/ojs/ index.php/ijoc/article/ viewPDFInterstitial/158/83/.
17. Broadband Industry Practices, Comments of the Center for Democracy & Technology to the FCC, WC Docket No. 07-52, at 3 (June 15, 2007), available at http://fjallfoss.fcc.gov/ prod/ecfs/retrieve.cgi?native-or-pdf=pdf&id- document=6519529426 [hereinafter Comments of the CDT].
18. For a general critique of this phenomenon, see EJ. DIONNE, JR., WHY AMERICANS HATE POLITICS (Simon & Schuster 1991). For a specific critical evaluation of the congressional debate on net neutrality, see Atkinson & Weiser, supra note 8, at 49.
19. For the classic discussion of the end-to-end principle, see J.H. Saltzer, D.P. Reed & D.D. Clark, End-to-End Arguments in System Design, 2 ACM TRANSACTIONS ON COMP. SYS. 277 (1984), available at http://web.mit.edu/Saltzer/ www/publications/endtoend/ endtoend.pdf (expounding the end-to-end principle).
20. Press Release, Senator Ron Wyden, Wyden Moves To Ensure Fairness of Internet Usage With New Net Neutrality Bill (Mar. 2, 2006), available at http://wyden.senate.gov/ newsroom/record.cfm?id=266467 (quoting Sen. Ron Wyden).
21. See Robert Hahn & Scott Wallsten, The Economics of Net Neutrality, THE ECONOMISTS' VOICE (Apr. 2006), available at http://www.aei-brookings.org/ admin/ authorpdfs/page.php?id=1269 ("Net neutrality has no widely accepted precise definition, but usually means that broadband service providers charge consumers only once for Internet access, don't favor one content provider over another, and don't charge content providers for sending information over broadband lines to end users.").
22. Compare Ask a Ninja Special Delivery 4 "Net Neutrality", YOUTUBE (May 11, 2006), http://www.youtube.com/watch?v=H69eCYcDcuQ (explaining the importance of network neutrality to prevent content discrimination), with Hands Off the Internet, YOUTUBE (Apr. 20, 2007), http://www.youtube.com/watch?v= tlhSbJYxOnc (arguing that fair competition in the market will bring maximum choice in suppliers, content, and technology to the consumer without unnecessary government regulation).
23. Letter from Jeff Bezos et al. to Senators Ted Stevens & Daniel Inouye (Apr. 25, 2006), http://netcompetition.org/docs/pronetneut/leaders-042506.pdf. Timothy Berners-Lee, the creator of the World Wide Web, echoed these remarks, explaining that "[a]nyone can build a new application on the Web, without asking me, or Vint Cerf [co-creator of the Internet Protocol], or their ISP, or their cable company, or their operating system provider, or their government, or their hardware vendor." Posting of Tim Berners-Lee to Timbl's Blog, Neutrality of the Net, May 2, 2006, http://dig.csail.mit.edu/breadcrumbs/node/ 132/ (May 2, 2006, 15:22 EST); see also Comments of the CDT, supra note 11, at 1 ("CDT strongly believes that the Internet's extraordinary success in facilitating independent innovation and speech is directly linked to the fact that any Internet user can provide content and services to any other willing Internet user, without getting permission from any 'gatekeeper.'").
24. Posting of Drew Clark to GigaOM, Is Google Changing Its Position on Net Neutrality?, GIGAOM, Mar. 13, 2007, http://gigaom.com/2007/03/13/is-google- changingits-position-on-net-neutrality/.
25. As Clark detailed: Peter Pitsch, Intel's director of communications policy, asked [McLaughlin]: "I inferred from what you said about [net neutrality] that you would not object to [carriers] making a particular offering, as long as that offering were made available on a non-discriminatory basis?" "That is my view," replied McLaughlin. He described a "strong" view of neutrality in which carriers are forbidden from charging companies for quality-ofservice (QoS) guarantees "because that breaks the free and open model" of the Internet. "There is a more pragmatic view that it is OK [to charge] as long as it is done in a non-discriminatory way." Id. (second, third, and fourth alterations in original).
26. Id.
27. A number of leading Internet technologists have elaborated on this point. See, e.g., David D. Clark & Marjory S. Blumenthal, The End-to-End Argument and Application Design: The Role of Trust, Telecommunications Policy Research Conference 2 (2007), http://web.si.umich.edu/tprc/papers/2007/748/ End%202%20end%20and%20trust%2010%20fi nal%20TPRC.pdf ("Applications and services on the Internet today do not just reside at the 'end points'; they have become more complex, with intermediate servers and services provided by third parties interposed between the communicating end-points.");
28. Jon M. Peha, The Benefits and Risks of Mandating Network Neutrality, and the Quest for a Balanced Policy, 1 INT'L J. COMM. 644, 659 (2007), available at http://ijoc.org/ojs/index.php/ijoc/ article/view/154/90 (noting a shift away from end-to-end for "sound technical reasons," such as the ability to provide enhanced security and faster access to stored content).
29. As one Internet Engineering Task Force report states: The essence of real-time service is the requirement for some service guarantees, and we argue that guarantees cannot be achieved without reservations. . . . [T]he user must be able to get a service whose quality is sufficiently predicable that the application can operate in an acceptable way over a duration of time determined by the user. Robert Braden, David Clark & Scott Shenker, Memorandum in Response to Request for Comments, Integrated Services in the Internet Architecture: An Overview, at 3 (1994), available at http://www.ietf.org/rfc/ rfc1633.txt;
30. see also F. Le Faucheur & W. Lai, Memorandum in Response to Request for Comments, Requirements for Support of Differentiated ServicesAware MPLS Traffic Engineering, at 2 (2003), available at http://www.ietf.org/rfc/rfc3564. txt ("To achieve fine-grained optimization of transmission resources and further enhanced network performance and efficiency . . . it may be desirable to perform traffic engineering at a per-class level instead of at an aggregate level."). Another article discusses the differentiated services strategy, stating: [I]t is a simple way of marking every packet for an appropriate service class, so that VoIP traffic can be handled with less jitter than Web browsing, for example. Obviously, this is desirable from a user viewpoint, and it's ironic that the more extreme legislative proposals for so-called "net neutrality" would ostensibly outlaw it, as well as outlawing priority handling for VoIP calls to 911.
31. Brian Carpenter, Better, Faster, More Secure, ACM QUEUE, Dec. 2006-Jan. 2007, at 42, 46, available at http://portal.acm.org/ft-gateway.cfm?id= 1189290&type=pdf.
32. See Jon Crowcroft, Net Neutrality: The Technical Side of the Debate, 1 INT'L J. OF COMM. 567, 572 (2007), available at http://ijoc.org/ojs/index.php/ ijoc/article/viewFile/ 159/84 ("Many ISPs offer statistical guarantees of performance (above and beyond a simple bland statement of 'Best Effort') . . . . [such as] zero packet loss . . . . ").
33. See Ou, A Rational Debate, supra note 2 ("[T]here have long been contractual agreements QoS .. . packet prioritization for business customers. These agreements allow customers to pay a premium to permit a certain percentage of traffic (usually a small percent) to get traffic prioritization across a carrier's network.").
34. Notably, the speed at which a web page downloads or a Voice over Internet Protocol (VoIP) application operates is not merely the function of the available bandwidth. In particular, even with a high level of bandwidth, "latency"- delay in the delivery of information - or the presence of "jitter" - variability in a communications link - can undermine the delivery of real-time communications. If there is only latency in a network, there are strategies to manage that issue (at least up to a point), but the presence of both latency and jitter is very difficult to manage for purposes of enabling real-time applications.
35. See Andrew Orlowski, Father of Internet Warns Against Net Neutrality, REGISTER, Jan. 18, 2007, http://www.theregister.com/2007/01/18/kahn-net- neutrality-warning (discouraging reporting on Robert Kahn's caution against legislation that restricts innovation and experimentation in network technologies).
36. A variety of technologies can assure higher levels of quality of service (QoS). See Peha, supra note 21, at 649, 653-54 (discussing QoS technologies). Some technologists fear that these technologies will be implemented in an anticompetitive manner. However, that fear does not mean that the technologies are incapable of providing valuable consumer benefits, rather that they can also facilitate anticompetitive discrimination. See John G. Waclawsky, IMS 101: What You Need to Know Now, Bus. COMM. REV. June 2005, at 18, 23 (describing the use of Internet Protocol Multimedia Subsystem as a double-edged sword insofar as it institutes "a control layer and a cash register over the Internet and [allows carriers to] creatively charge" for access to its functionalities).
37. Editorial, Keeping a Democratic Web, N.Y. TIMES, May 2, 2006, at A24, available at http://www.nytimes.com/2006/05/02/opinion/02tue3.html.
38. Editorial, The Eden Illusion, WASH. POST, Mar. 13, 2006, at A14, available at http://www.washingtonpost.com/wp-dyn/content/article/2006/03/12/ AR2006031200808.html.
39. Id. As one report explained, content and applications providers might be "willing to pay Akamai [and other content delivery networks] a premium to deliver their content faster and more reliably" to end users. Scott Woolley, Video Prophet, FORBES, Apr. 2007, at 68, 72, available at http://www.forbes.com/forbes/2007/0423/068-print.html.
40. For a fuller explanation of the price discrimination concept, see NUECHTERLEIN & WEISER, supra note 8, at 176-77.
41. See Hahn & Wallsten, supra note 15, at 4 ("The need to cover fixed costs, coupled with society's interest in having platform operators internalize the benefits that accrue to both sides of the market [i.e., the broadband provider and applications developers], suggests that these providers should have maximum price flexibility to encourage innovation."); see also Howard A. Shelanski, Adjusting Regulation to Competition: Toward a New Model for U.S. Telecommunications Policy, 24 YALE J. ON REG. 55, 81 (2007) (explaining the importance of allowing recovery of front-end fixed cost investments).
42. See DELOITTE TOUCHE TOHMATSU, TELECOMMUNICATIONS PREDICTIONS: TMT TRENDS 2007, 7 (2007), available at http://www.deloitte.com/dtt/cda/doc/content/ dtt-TelecomPredictions011107.pdf ("Clearly, something has to change in the economics of Internet access, such that network operators and ISPs can continue to invest in new infrastructure and maintain service quality, and consumers can continue to enjoy the Internet as they know it today.").
43. Patricia O'Connell, At SBC, It's All About "Scale and Scope, " Bus. WK. ONLINE, Nov. 7, 2005, available at http://www.businessweek.com/ @@n34h*IUQu7KtOwgA/magazine/ content/05-45/b3958092.htm.
44. See Marguerite Reardon, Qwest CEO Supports Tiered Internet, ZDNET, Mar. 15, 2006, http://news.zdnet.com/2100-1035-22-6050109.html (explaining Notebaert's analogy that like Federal Express and UPS, broadband providers should be afforded the opportunity to enter into similar guaranteed service delivery deals).
45. For a discussion of this issue, see PHILIP J. WEISER, THE FUTURE OF VIDEO: NEW APPROACHES TO COMMUNICATIONS REGULATION 19 (2007), available at http://www.aspeninstitute.org/atf/cf/%7BDEB6F227-659B-4EC8-8F84-8DF23CA704F5%7 D/C&S-THE-FUTURE-OF-VIDEO.PDF.
46. Press Release, Progress & Freedom Found., PFF's May Warns of Effects of Network Neutrality Provision, (Apr. 25, 2006), available at http://www.pff.org/news/news/ 2006/042506maynetneutrality.html.
47. For a discussion of spectrum regulation and how it limits efficient entry, see NUECHTERLEIN & WEISER, supra note 8, at ch. 7.
48. Wu & Yoo, supra note 9, at 588 (explicating Yoo's argument that wireless broadband platforms provide a basis for the contestability argument).
49. See Farrell & Weiser, supra note 8, at 89-90 (listing exceptions to the ICE principle).
50. Madison River Commc'ns, LLC, Consent Decree, 20 F.C.C.R. 4296 (2005), available at http://hraunfoss.fcc.gov/edocs-public/attachmatch/DA-05-543A2.pdf. There have been some examples abroad as well. See, e.g., Cho Jin-seo, Cable TV Operators Block HanaTV, KOREA TIMES, Oct. 22, 2006, available at http://www.asiamedia.ucla.edu/ article.asp?parentid=55961 (reporting that cable providers had blocked Internet-based television services).
51. NUECHTERLEIN & WEISER, supra note 8, at 571 n.15 (quoting Daniel Klein, Why Vonage Is Just a Fad, ZDNET, May 19, 2004, http://techupdate.zdnet. com/techupdate/ stories/main/Why-Vonage-Just-Fad.html).
52. See Atkinson & Weiser, supra note 8, at 58 (describing the nature of the arrangement).
53. For a very thoughtful discussion of the issue, see Robin S. Lee, Vertical Integration and Exclusivity in Platform and Two-Sided Markets (NET Institute, Working Paper No. 07-39, 2007), available at http://ssrn.com/abstract=1022682. In particular, Lee analyzes the sixth generation game console market with respect to the arrangement between the platform providers (console makers) and applications developers (game producers). Based on his analysis, he concludes that the use of exclusive arrangements facilitated successful entry by upstarts and thus gave rise to dynamic efficiency benefits. Viewed through a merely static lens, by contrast, he suggests that a ban on exclusive vertical arrangements would benefit consumers. He explains, however, that this conclusion is potentially misleading insofar as it presumes the dynamic benefits (i.e., increased entry) that might not occur in the absence of such arrangements. Id. at 4. For a related analysis of the countervailing factors involved in regulating platform competition,
54. see Philip J. Weiser, The Internet, Innovation, and Intellectual Property Policy, 103 COLUM. L. REV. 534 (2003).
55. Joseph Farrell, Open Access Arguments: Why Confidence Is Misplaced, in NET NEUTRALITY OR NET NEUTERING: SHOULD BROADBAND INTERNET SERVICES BE REGULATED? 195, 200 (Thomas M. Lenard & Randolph J. May eds., 2006).
56. Tim Wu, Wireless Net Neutrality: Cellular Carterfone and Consumer Choice in Mobile Broadband 13 (New America Foundation: Wireless Future Program, Working Paper No. 17, 2007), available at http://www.newamerica.net/files/ WorkingPaperl7-Wireless NetNeutrality-Wu.pdf.
57. Bill Ray, Orange and Vodafone Cripple Nokia's Flagship, THE REGISTER, Apr. 18, 2007, available at http://www.theregister.co.uk/2007/04/18/n95- crippled/.
58. See Wu, supra note 46, at 24.
59. During 2006, for example, it became difficult to keep track of the network neutrality proposals without a scorecard. For such a scorecard, see Anne Broache, Net Neutrality Field in Congress Gets Crowded, CNET NEWS.COM, May 19, 2006, http://news.com.com/2102-1028-3-6074564.html. In general, the bills fit into either the camp of imposing severe restrictions on network operators or in limiting the scope of authorized regulation. Like Congressman Markey's bill (Network Neutrality Act of 2006, H.R. 5273, 109th Cong. (2006)), Senators Snowe and Dorgan proposed a bill (Internet Freedom Preservation Act, S. 2917,109th Cong. (2006)) that prohibited the prioritization of Internet traffic for a fee. Like Congressman Barton's bill (Communications Opportunity, Promotion, and Enhancement Act, H.R. 5252, 109th Cong. (2006)), Senator Stevens introduced a bill (Communications, Consumer's Choice, and Broadband Deployment Act of 2006, S. 2686, 109th Cong. (2006)) that limited the scope of FCC authority and called for further study of the issue.
60. See Nat'l Cable & Telecomm. Ass'n v. Brand X Internet Servs., 545 U.S. 967, 974 (2005) (upholding classification of cable modem service as an "information service");
61. Appropriate Framework for Broadband Access to the Internet over Wireline Facilities, Report and Order and Notice of Proposed Rulemaking, 20 F.C.C.R. 14,853, 14,862 (2005) (classifying DSL connections as an "information service").
62. Brand X, 545 U.S. at 996. James Speta has argued that Brand X misconstrues the scope of the FCCs authority, but I disagree.
63. Compare James B. Speta, FCC Authority to Regulate the Internet: Creating It and Limiting It, 35 LOY. U. CHI. L.J. 15 (2003), with Weiser, Toward a Next Generation, supra note 8, at 85.
64. The text of Congressman Markey's proposed Internet Freedom Preservation Act is available at http://markey.house.gov/docs/telecornm/hr5353.pdf.
65. 15 U.S.C. §§ 44, 45(a)(2) (2000).
66. See FTC Jurisdiction over Internet Access Services: Hearing Before the S. Judiciary Comm., 109th Cong. 3 n.4 (2006) (citing 15 U.S.C. §§ 44, 45(a)(2) (2000)) (prepared statement of the Federal Trade Commission), available at http://www.ftc.gov/os/2006/06 / P052103CommissionTestimonyReBroadbandInternetAccessServices06142006Senate.pdf;
67. see also Reconsidering Our Communications Laws: Ensuring Competition and Innovation: Hearing Before the S. Judiciary Comm., 109th Cong. (2006), available at http://www.pff .org/issues-pubs/testimony/060616gifford-com.pdf (testimony of Raymond L. Gifford, President & Senior Fellow, The Progress & Freedom Foundation).
68. Cf Vonage Holdings Corporation Petition for Declaratory Ruling Concerning an Order of the Minnesota Public Utilities Commission, Memorandum Opinion and Order, 19 F.C.C.R. 22,404 (2004) (preempting state regulation of VoIP).
69. LOUIS D. BRANDEIS, OTHER PEOPLE'S MONEY AND How THE BANKERS USE IT 62 (1933).
70. As a former FTC Bureau of Competition put it: "Agencies enhance understanding of the process and foster better antitrust risk assessment by companies when they explain why they decided to act or not to act. Transparency matters. Critical review of agency performance and of outcomes is not possible without access to information." U.S. Merger Enforcement Policy, Hearing Before the Antitrust Modernization Comm'n 12-13 (2005), available at http://www.amc.gov/commission-hearings/pdf/Baer-Statement.pdf (testimony of William J. Baer, Partner and Chair of the Antitrust Practice, Arnold & Porter, LLP).
71. Transcripts from "Protecting Consumers in the Next Tech-Ade," are available at http://www.ftc.gov/techade.
72. Anne Broache, FTC Chief Warns Against 'Unnecessary' Net Rules, CNET NEWS.COM, Jan. 2, 2007, http://news.com.com/FTC+chief+warns+against+unnecessary+ Net+rules/2100-1028-3-6132772.html.
73. Art Reisman, Analysis: The White Lies ISPs Tell About Broadband Speeds, PCMAG.COM, July 5, 2007, http://www.pcmag.com/article2/0,1895,2155140,00.asp. To the same end, an AT&T Group President reported, based on that company's test of 150 cable modems in one market, that "[e]ven though peak speeds averaged around 3 Mbps during periods of low congestion, still far below the 6 to 8 Mbps speeds, average speeds hovered around 300 kbps to 400 kbps."
74. Cynthia Brumfield, AT&T: Sample Cable Modem Speeds Average 400 Kbps, IP DEMOCRACY, Feb. 27, 2008, available at http://www.ipdemocracy.com/ archives/002891 att-sample-cable-modem-speeds-average-400-kbps.php.
75. BROADBAND CONNECTIVITY, supra note 3, at 132.
76. Australian Competition & Consumer Commission, Broadband Internet Speed Claims and Trade Practices Act 1974 5 (2007), available at http://www.iia.net.au/docs/ BroadbandSpeedClaims.pdf.
77. Britain Failing' Net Speed Tests, BBC NEWS, Aug. 2, 2007, available at http://news.bbc.co.uk/2/hi/technology/6924866.stm.
78. Id.
79. Such assurances, significantly, are likely to address issues related to latency and jitter as well as available bandwidth.
80. To the extent that a broadband Internet access service is likely to be limited in any regard such that it cannot support commonly used applications effectively, it is important that such limitations be conspicuously disclosed. See NETWORK RELIABILITY AND INTEROPERABILITY COUNCIL VII, BROADBAND ARCHITECTURES, BEST PRACTICES & SERVICE FEATURES FOR THE INCREASED DEPLOYMENT OF HIGH-SPEED RESIDENTIAL INTERNET ACCESS SERVICE 15 (2005), available at http://www.nric.org/meetings/docs/meeting-20051019/ NRICVII-FG4-FinalReport-September-2005.pdf (noting the expectation that broadband connections feature levels of latency low enough to be compatible with commonly used applications).
81. This concern is also true in related contexts, such as online privacy policies. See, e.g., Louise Story, F.T.C. Takes a Look at Web Marketing, N.Y. TIMES, NOV. 2, 2007, at C8, available at http://www.nytimes.com/2007/11/02/ technology/02adco.html?-r=1&oref=slogin (reporting FTC Commissioner Leibowitz's call for standard privacy rules, noting that in a survey, only 1% of high school educated consumers can understand privacy policies of large companies).
82. See PHILIP J. WEISER, REPORT FROM THE CENTER FOR NEW WEST PUTTING NETWORK NEUTRALITY IN PERSPECTIVE 5 (2007), http://www.centerfornewwest.org/pdf/ TelecomSummary.pdf;
83. Lucas van Grinsven, Google and Cable Firms Warn of Risks from Web TV, USATODAY.COM, Feb. 7, 2007, http://www.usatoday.com/tech/news/2007-02-07- googleweb-tv-x.htm (citing the Gartner report that 60% of Internet traffic is peer-to-peer video).
84. See, e.g., CISCO SYSTEMS, INC., CISCO SERVICE CONTROL APPLICATION FOR BROADBAND: USER GUIDE VERSION 3.0.5 (2006), http://www.cisco.com/application/ pdf/en/ us/guest/products/ps6135/c1626/ccmigration-09186a008078a9f1.pdf (outlining the Cisco SCE 2000 product, which recognizes 600 different protocols and allows for controlling traffic by treating different applications differently).
85. Similarly, Packeteer has developed a system for identifying and managing traffic. See PACKETEER, APPLICATION LIST (2007), http://www.packeteer.com/ resources/prod-sol/ApplicationDiscovery.pdf.
86. A Network Reliability and Interoperability Council working paper elaborated on recommended disclosure practices, explaining that: Service providers should make information available to customers that include[s] content filtering . . . .
87. Service [providers should make available meaningful information about expected performance with respect to upstream and downstream throughput and any limitations of the service; best effort services "up to" or unspecified bit rates services should be specified as such in a clearly identifiable manner.
88. Service providers should make available meaningful information about expected performance with respect to upstream and downstream throughput and any limitations of the service. Specified rate services (such as those covered by QoS or similar systems) should be handled by an SLA between the parties.
89. Doug Davis, NETWORK RELIABILITY AND INTEROPERABILITY COUNCIL VI: FOCUS GROUP 4 - BROADBAND 10 app.a (2003), http://www.nric.org/fg/charter-vi/fg4/ NRIC6FG4Completed.pdf.
90. See Drew Clark, Comcast and Freedom to Obtain Service Plan Information, DREWCLARK.COM, NOV. 6, 2007, http://www.drewclark.com/comcast-and-freedom- toobtain-service-plan-information/ (stating that Comcast warns consumers that they may not "inhibit, interfere with, or degrade any other user's use of the Service, nor represent (in the sole judgment of Comcast) an overly large burden on the network");
91. see also Drew Clark, Highlights from the Terms of Service of the Largest Broadband Providers, DREWCLARK.COM, http://www.drewclark.com/tosmatrix.php (last visited Feb. 28, 2008) (providing a comparison of several major broadband providers' terms of service).
92. PETER ECKERSLEY ET AL., PACKET FORGERY BY ISPS: A REPORT ON THE COMCAST AFFAIR, ELECTRONIC FRONTIER FOUNDATION 2007, available at http://www.eff.org/ files/eff-comcast-report2.pdf.
93. See Grant Gross, EFF: Comcast Continues to Block P-to-P, WASH. POST, NOV. 30, 2007, http://www.washingtonpost.com/wp-dyn/content/article/2007/11/30/ AR2007113001543 .html (reporting on Comcast's response). Taking issue with Comcast's claim, the EFF report suggested that Comcast's position that its network management techniques did not block packets is "only true under special conditions, and is certainly not true in general." ECKERSLEY ET AL., supra note 72, at 5. In support of Comcast, another commentator explained that Comcast was using a reasonable network management technique: We can think of [Comcast's restrictions on peer-to-peer traffic] as a freeway onramp that has lights on it to rate limit the number of cars that may enter a freeway. Those lights aren't there to say people of a certain race can pass through or people of a certain race must wait longer in line; everyone must wait their turn. If you didn't have the lights and everyone tries to pile on to the freeway at the same time, everyone ends up with worse traffic. Comcast doesn't block you from using BitTorrent, it simply limits the number of simultaneous uploads you can perform at once.
94. George Ou, A Rational Debate on Comcast Traffic Management, ZDNET, NOV. 6, 2007, http://blogs.zdnet.com/Ou/?p=852&page=2 [hereinafter Ou, Comcast Traffic Management].
95. Brad Stone, Comcast: We're Delaying, Not Blocking, BitTorrent Traffic, N.Y. TIMES BITS BLOG, Oct. 22, 2007, http://bits.blogs.nytimes.com/2007/10/22/ comcast-weredelaying-not-blocking-bittorrent-traffic.
96. Randy Barrett, Putting the Squeeze on Bandwidth Hogs: How Operators Deal with Their Greediest Users, MULTICHANNEL NEWS, May 7, 2007, available at http://www .multichannel.com/article/CA6439454.html ("Of nine service providers surveyed by Multichannel News, only three-Cox Communications, Shaw Communications and Qwest Communications International-explicitly state limits.").
97. See ECKERSLEY ET AL., supra note 72, at 8-9 (acknowledging that this claim is subject to question, as purportedly secret network management techniques can be discerned and reported in Internet-based chat groups, leading to an arms race of sorts between network owners and hackers).
98. Id. at 7-8. Ed Feiten, a respected technologist, similarly criticizes Comcast's choice of network management techniques, concluding that: There are well-established mechanisms for dealing with traffic congestion on the Internet. Networks are supposed to respond to congestion by dropping packets; endpoint computers notice that their packets are being dropped and respond by slowing their transmissions, thus relieving the congestion. . . .
99. What Comcast is doing instead is to cut off connections by sending forged TCP Reset packets to the endpoints. . . . Doing this is a violation of the TCP protocol, which has at least two ill effects: it bypasses TCP's well-engineered mechanisms for handling congestion, and it erodes the usefulness of Reset packets as true indicators of error.
100. Edward W. Feiten, Comcast Blocks Some Traffic, Won't Explain Itself, FREEDOM TO TINKER, Oct. 23, 2007, available at http://www.freedom-to-tinker.com/ ?p=1217.
101. A provider of video programming using peer-to-peer technology, Vuze, has petitioned the FCC to evaluate setting rules governing reasonable network management, suggesting that any forms of blocking, degradation, or unreasonable discrimination are illegitimate. See Petition to Establish Rules Governing Network Management Practices by Broadband Network Operators, WC Docket 07-52 (Nov. 14, 2007), available at http://www.publicknowledge.org/pdf/vuze-petition- 20071114.pdf. On the merits of this issue, some commentators suggest that there is reason to believe that Comcast's choice of network management techniques was appropriate. As George Ou reported (based on a conversation with Richard Bennett): Simply put, there is no queue for you to prioritize in the first place on a cable broadband network. [Resorting to forged packets] isn't the prettiest solution in the world but there is nothing pretty about a shared collision domain network topology and there aren't any other solutions other than active network management. Conventional QoS (Quality of Service) priority queuing works on a router which comprises most of the Internet, but it has no effect on a shared last-mile collision domain network where packets are simply discarded if they collide. Simply put, there is no queue for you to prioritize in the first place. Actively managing the number of simultaneous uploads cable broadband BitTorrent users improves performance for everyone and every application including BitTorrent. Ou, Comcast Traffic Management, supra note 73. For Bennett's own defense of Comcast, see Edward Feltoa Ed Felton 's Alternate Internet, THE GREAT AMERICAN BLOG, Oct. 23, 2007, http://bennett.com/blog/index. php/archives/2007/10/23/ed-felten-alternate-internet, saying: Nothing in the conventional arsenal of TCP effectively limits BitTorrent's appetite for bandwidth, it's all up to the user. And if he's a hog, it's out of control.
102. Fundamentally, the problem that Comcast addresses with its TCP RSTs isn't an Internet problem, it's an Intranet problem, as in the DOCSIS network inside Comcast doesn't handle high loads of upstream traffic without going unstable. See also Larry Seltzer, Network Policies Should Be Open, Not Neutral, EWEEK.COM, Nov. 6, 2007, http://www.eweek.eom/article2/0,1895,2213092,00.asp ("In fact, rate-limiting is a common-sense practice with a service like BitTorrent, which can create a constant baseline of traffic across a network.").
103. See Seltzer, supra note 78 ("The problem here isn't limiting bandwidth, its [sic] dishonesty and a failure to disclose procedures.").
104. Stone, supra note 74.
105. See Wu, supra note 46, at 11.
106. Comcast's terms of service can be found at http://www.comcast.net/terms/ (last visited Apr. 26, 2008). For a discussion of Comcast's revised terms of service, see Eric Bangeman, Comcast Tweaks Terms of Service in Wake of Throttling Uproar, ARS TECHNICA, Feb. 7, 2008, http://arstechnica.com/news.ars/ post/20080207-comcast-tweaksterms-of-service-in-wake-of-throttling-uproar.html.
107. The USC Annenberg Center's Network Neutrality principles called this "Basic Access Broadband," defining it as "a meaningful, neutral Internet connectivity service." http://www.boingboing.net/2006/03/24/ principles-for-netwo.html (last visited Apr. 25, 2008).
108. For a discussion of different systems of prioritization, see Edward W. Felten, Nuts and Bolts of Network Neutrality, in 24TH ANNUAL INSTITUTE ON TELECOMMUNICATIONS POLICY & REGULATION 317-34 (2006), available at http://itpolicy.princeton.edu/pub/ neutrality.pdf.
109. See Steven Hetcher, The FTC as Internet Privacy Norm Entrepreneur, 53 VAND. L. REV. 2041, 2047 (2000) (recapping the FTC's actions, which led to an increase in the number of Web sites offering privacy policies)
110. BROADBAND CONNECTIVITY, supra note 3, at 137 ("FTC guidance may be useful should consumers encounter widespread difficulty obtaining or understanding material information about broadband offerings and service."). Consequently, the FTC concluded that "we intend to continue to monitor industry practices, and, if appropriate, engage the industry in discussions of best practices." Id.
111. See FTC, Online Behavioral Advertising: Moving the Discussion Forward to Possible Self-Regulatory Principles, available at http://www.ftc.gov/os/2007/12/ P859900stmt.pdf.
112. See generally Pamela Samuelson & Jason Schultz, Should Copyright Owners Have to Give Notice of Their Use of Technical Protection Measures?, 6 J. ON TELECOMM. & HIGH TECH. L. 41 (2007) (highlighting the need for transparency in the context of technical protection measures that can restrict uses of digital goods).
113. As Ellen Goodman related, [I]t seems natural that food manufacturers with a relatively good nutritional story to tell would disclose nutritional information. Kraft and Nabisco could then compete on nutritional value or Kraft could use nutritional information to distinguish its premium brands like Progresso. So one might think, and yet the market did not produce widespread disclosure of nutritional information until federal regulation required it. It was the regulation that created a market for nutritional information that now appears to be strong.
114. Ellen P. Goodman, Stealth Marketing and Editorial Integrity, 85 TEX. L. REV. 83, 139 (2006) (internal citations omitted);
115. see also Archon Fung et al., The Political Economy of Transparency: What Makes Disclosure Policies Effective? 16-17 (Ash Inst. For Democratic Governance and Innovation, Harvard Univ., OP-03-04, 2004), available at http://papers.ssrn.com/sol3/papere.cfm?abstract-id=766287 (noting competition based on nutritional information after government regulation set forth the framework for disclosure).
116. Ginger Zhe Jin & Phillip Leslie, The Case in Support of Restaurant Hygiene Grade Cards, 20 CHOICES 97, 100-01 (2005), available at http://www.stanford.edu/-pleslie/ Jin%20and%20Leslie%20Choices%202005.pdf ("By increasing the provision of information to consumers, powerful economic incentives are created for restaurants to improve hygiene, leading to a significant improvement in public health outcomes.").
117. See BROADBAND CONNECTIVITY, supra note 3, at 136 (recognizing the potential for such an approach, noting that "the Commission applauds industry self-regulation" and suggesting that "any program of self-regulation is more effective when complemented by strong enforcement mechanisms"). Similarly, Chairwoman Majoras echoed the point, suggesting that "self-regulation by broadband providers could be an effective complement to FTC enforcement of the consumer protection laws. I have commended self-regulation efforts in many other industries and contexts and would encourage broadband providers to also consider such a model." Deborah Piatt Majoras, Chairwoman, FTC, Keynote Address at the Federal Communications Bar Association Annual Meeting; The FTC: Working for Consumers in the On-Line World 13 (June 27, 2007) (transcript available at http://www.ftc.gov/speeches/majoras/ 070627fcba.pdf).
118. See Jeffrey S. Edelstein, Self-Regulation of Advertising: An Alternative to Litigation and Government Action, 43 IDEA 509, 527 (2003) (explaining the regime and noting that only 5% of cases are referred to the FTC and other government agencies);
119. see also Andrew Strenio et al., Self-Regulatory Techniques for Threading the Antitrust Needle, ANTITRUST Summer 2004, 57, 57 (calling the National Advertising Division "a notable example of successful self- regulation"). This regime calls for ultimate FTC oversight, which is significant because self-regulatory regimes can be ineffective to the extent that there is no credible threat of enforcement and that gaming will be punished to prevent firms from misleading consumers to gain an advantage.
120. See Posting of Bill Henderson to Empirical Legal Studies Blog, USNWR Gaming and the Failure of Self-Regulation, EMPIRICAL LEGAL STUDIES BLOG, http://www.elsblog.Org/the-empirical-legal-studi/2007/0 l/usnwr-gaming -an.html (Jan. 25, 2007, 00:29 EST);
121. see also Neil Weinstock Netanel, Cyberspace 2.0, 79 TEX. L. REV. 447 (2000)
122. (reviewing LAWRENCE LESSIG, CODE AND OTHER LAWS OF CYBERSPACE (1999) and
123. ANDREW L. SHAPIRO, THE CONTROL REVOLUTION: How THE INTERNET IS PUTTING PEOPLE IN CHARGE AND CHANGING THE WORLD WE KNOW (1999) and arguing, based on an Internet privacy case, that self-regulatory programs only work when government oversight mechanisms are in place).
124. A popular BitTorrent client (used for peer-to-peer file sharing), Azureus, has a wiki that allows users to categorize their ISPs in terms of their policies on shaping peer-to-peer traffic. See Bad ISPs, AZUREUSWIKI.COM, http://www.azureuswiki.com/index.php/Bad-ISPs (last visited Apr. 20, 2008).
125. Richard A. Posner, Antitrust in the New Economy, 68 ANTITRUST L.J. 925, 936-37 (2001).
126. See Joseph D. Kearney & Thomas W. Merrill, The Great Transformation of Regulated Industries Law, 98 COLUM. L. REV. 1323, 1330-40 (1998) (examining the changes over the last two decades in the structure of relationships between service providers and consumers railroad regulation);
127. see also JAMES C. BONBRIGHT, PRINCIPLES OF PUBLIC UTILITY RATES 83 (1961) (discussing the existence of rate standards in the railway industry).
128. See Hush-A-Phone Corp. v. United States, 238 F.2d 266 (D.C. Cir. 1956) (rejecting an attempt by AT&T to invoke a tariff banning foreign attachments).
129. See Andrew Odlyzko, Network Neutrality, Search Neutrality, and the Never-Ending Conflict Between Efficiency and Fairness in Markets 9 (Jan. 27, 2008) (unpublished manuscript), available at http://papers.ssrn.com/sol3/papers. cfm?abstract-id=1095350.
130. See Tim Wu, Why Have a Telecommunications Law? Anti-Discrimination Norms in Communications, 5 J. ON TELECOMM. & HIGH TECH. L. 15,17 (2006) (arguing that "decades of telecommunications experience" support the "one rule" proposal for a single antidiscrimination rule).
131. See generally Kevin Werbach, Only Connect, 22 BERKELEY TECH. L.J. 1233 (2007) (emphasizing that an understanding of the distinction between interconnection and nondiscrimination is critical for understanding the challenges of telecommunications regulation).
132. The term "complementor" refers to the developer of an application that rides on a platform. More generally, a complementor is a firm that develops a product where sales of that product increases demand for (i.e., serves as a complement for) the primary product (sometimes referred to as the "platform").
133. See, e.g., Pac. Tel. & Tel. Co. v. Anderson, 196 F. 699, 703 (E.D. Wash. 1912) (ruling that, under original common carriage rules, a co-carrier was not entitled to interconnection);
134. see also James B. Speta, A Common Carrier Approach to Internet Interconnection, 54 FED. COMM. L.J. 225, 258 (2002) (noting that the distinction between a customer's access (which was governed by a common carriage requirement) and a co-carrier's access reflected (1) where interconnection takes place, (2) whether it is comparable to what the carrier gives itself, and (3) what price the carrier may charge);
135. Cellular Commc'ns Sys., Inquiry into the Use of the Bands 825-845 MHz, Report and Order, 86 F.C.C.2d 469, ¶ 56 (1981) (noting that "[a] cellular system operator is a common carrier and not merely a customer" and thus interconnection arrangements should be designed "to minimize unnecessary duplication of switching facilities").
136. In particular, Congress instituted such a rule in the Communications Act of 1934. See 47 U.S.C. § 201(b) (2000).
137. See, e.g., MCI Commc'ns Corp. v. AT&T, 708 F.2d 1081, 1101-03 (7th Cir. 1983) (assigning liability based on AT&T's denial of interconnection to long distance competitors);
138. Litton Sys., Inc. v. AT&T, 700 F.2d 785, 814-15 (2d Cir. 1983) (noting that AT&T's predatory practices in relation to rivals in the equipment manufacturing market gave rise to antitrust liability);
139. United States v. AT&T, 552 F. Supp. 131, 224 (D.D.C. 1982) (approving the break-up of AT&T and the imposition of equal access mandates to address AT&T's discriminatory practices against long distance competitors and rival equipment manufacturers), aff'd, 460 U.S. 1001 (1983).
140. See, e.g., Richard A. Epstein, A Clear View ofThe Cathedral: The Dominance of Property Rules, 106 YALE L.J. 2091, 2119-20 (1997) (calling for an interconnection requirement on the ground that "the blockade position of the local monopolists is such that they would have every incentive to guard access to their networks against their would-be competitors").
141. The rates for compensation paid by the network originating the traffic to the network that terminates the traffic are at the heart of the nettlesome policy issues that are collectively termed "intercarrier compensation." These issues are discussed in NUECHTERLEIN & WEISER, supra note 8, at 291-331.
142. Access Charge Reform, Reform of Access Charges Imposed by Competitive Local Exchange Carriers, Seventh Report and Order and Further Notice of Rulemaking, 16 F.C.C.R. 9923, 9932-33 (2001), available at http://www.fcc.gov/ BureausCommon-Carrier/ Orders/2001/fcc01146.pdf.
143. See generally Jason Oxman, The FCC and the Unregulation of the Internet (FCC, Office of Plans & Policy, Working Paper No. 31, 1999), available at http://www .fcc.gov/Bureaus/OPP/working-papers/oppwp31.pdf (detailing the concerns about the proper role of the FCC in the Internet age and the lessons the FCC has learned in the last three decades).
144. See generally Michael Kende, The Digital Handshake: Connecting Internet Backbones (FCC, Office of Plans & Policy, Working Paper No. 32, 2000), available at http://www.fcc.gov/Bureaus/OPP/working-papers/oppwp32.pdf (maintaining that the current unregulated Internet backbone did not give rise to competition policy concerns and that regulation was unnecessary).
145. In particular, the Justice Department mandated the divestiture of InternetMCI when MCI merged with Worldcom (which owned UUNet). It also prevented MCIWorldcom from merging with Sprint at least in part because the merger would bring together two leading Internet backbone firms. For a discussion of the Department's rationale in these cases, see Constance K. Robinson, Dir. of Operations and Merger Enforcement, Antitrust Div., U.S. Dep't of Justice, Address Before the Practicing Law Institute: Network Effects in Telecommunications Mergers (Aug. 23, 1999), available at http://www.usdoj.gov/ atr/ public/speeches/3889.pdf.
146. See Am. Online, Inc., Decision and Order, FTC Docket No. C-3989 (Apr. 17, 2001), available at http://www.ftc.gov/os/2001/04/aoltwdo.pdf. For a critical evaluation and discussion of the "open access" issue,
147. see NUECHTERLEIN & WEISER, supra note 8, at 159-68.
148. The FCC initially imposed an interoperability mandate, but lifted it two years later. See Applications for Consent to the Transfer of Control of Licenses and Section 214 Authorizations, Memorandum Opinion and Order, 16 F.C.C.R. 6547, 6604 (2001), available at http://www.fcc.gov/Bureaus/Cable/Orders/2001/ fcc01012.pdf;
149. Petition of AOL Time Warner Inc. for Relief from the Condition Restricting Streaming Video AIHS, Memorandum Opinion and Order, 18 F.C.C.R. 16,835, 16,835 (2003), available at http://www.fcc.gov/transaction/aol-tw.html (follow "MO&O, Filed on Behalf of Cable Service Bureau" hyperlink). For a critique of the FCCs decision,
150. see Philip J. Weiser, Internet Governance, Standard Setting, and Self-Regulation, 28 N. KY. L. REV. 822 (2001).
151. See Annabelle Gawer & Rebecca Henderson, Platform Owner Entry and Innovation in Complementary Markets: Evidence from Intel, 16 J. ECON. & MGMT. STRATEGY 1, 1 (2007), available at http://www.Platformleadership.com/ Gawer%20Henderson%0JEMS%202007.pdf (noting that, in platform markets, platform providers "may have considerable influence over the livelihood of developers of complementary products, and the behavior of platform owners toward the other firms in the ecosystem has been subject to much scrutiny");
152. see also Annabelle Gawer & Michael A. Cusumano, Strategies for Being a Platform Leader, WALL ST. J., Oct. 27, 2007, at R6 (emphasizing that a platform sponsor "must create economic incentives that encourage other firms to develop complementary applications for the platform, and at the same time protect its own ability to profit from its innovations").
153. The perspective that the Internet's architecture is both important and subject to change owes a great debt to Lawrence Lessig. See LAWRENCE LESSIG, CODE AND OTHER LAWS OF CYBERSPACE 25 (1999).
154. 47 U.S.C. § 230(b)(2) (2000).
155. See Nat'l Cable & Telecomm. Ass'n v. Brand X Internet Servs., 545 U.S. 967, 986 (2005) (upholding classification of cable modem service as an "information service").
156. See BROADBAND CONNECTIVITY, supra note 3, at 77-79 (detailing the terminating access monopoly issue and the ensuing harms).
157. See NUECHTERLEIN & WEISER, supra note 8, at 291-331 (proposing alternate policy approaches to the terminating access monopoly issue).
158. See BROADBAND CONNECTIVITY, supra note 3, at 77-78 (noting how large access payments for cell phone calls in Europe give rise to significantly lower usage rates than in the United States).
159. Jon Leibowitz, Comm'r, FCC, Concurring Statement Regarding the Staff Report: "Broadband Connectivity Competition Policy" (2007), available at http://www.ftc.gov /speeches/leibowitz/V070000statement.pdf.
160. Thus, in theory, it is not merely the broadband provider but also the applications developer which can engage in strategic behavior. Consider, for example, that Google could decide to boycott a particular broadband provider in order to hold up that provider for either a payment or, as the case might be, an absence of a payment that is otherwise warranted to offset infrastructure development costs. After all, consumer demand for applications and content are critical drivers of demand for broadband in the first place, and most broadband users would be deeply disturbed if Google were unavailable to them.
161. As technology commentator Om Malik explains, "Google envy is a generic term I use when referring to companies that are jealous of profits made by online advertising players such as Yahoo and Google." Posting of Om Malik to GigaOM, Comcast Wants to Be Yahoo, GIGAOM, available at http://gigaom.com/2006/08/15/comcast-wants-to-beyahoo (Aug. 15, 2006, 23:09 EST).
162. In particular, platform firms often develop contractual or structural arrangements to assure complementors (i.e., applications developers) that they will not engage in strategic behavior to maximize their profits by charging later-imposed fees or other "hold-up" tactics taken after the complementor develops a new product. For such, this sort of behavior is called "ex post opportunism." There is a significant literature discussing the phenomenon and noting measures that can prevent it from taking place. See, e.g., Oliver E. Williamson, Credible Commitments: Using Hostages to Support Exchange, 83 AM. ECON. REV. 519, 519-20 (1983).
163. Gawer & Henderson, supra note 111, at 3.
164. See United States v. Microsoft Corp., 231 F. Supp. 2d 144 (D.D.C. 2002) (detailing the factual basis for the case).
165. The effectiveness of that decree is open to question, highlighted by the fact that the district court extended it on the grounds that Microsoft had moved "too slowly in delivering technical documentation to rivals licensing its Windows communication protocols." See Anne Broache, Judge Adds Two Years to Microsoft Antitrust Deal, CNET NEWS.COM, May 17, 2006, http://news.com.com/ 2102-1012-3-6073250.html.
166. Benjamin J. Romano, DOJ Says Microsoft Antitrust Settlement a Success; California, Other States Disagree, SEATTLE TIMES, Aug. 30, 2007, available at http://blog.seattletimes.nwsource.com/techtracks/archives/2007/08/ doj-says-microsoft-antit rust-settlement-a-success.html (describing some of the controversy surrounding the Microsoft settlements and its fallout).
167. The posited scenario is, of course, not a hypothetical scenario as it reflects the facts of a case decided by the FCC in 2000 when it ruled that Time Warner could not terminate its carriage of ABC on its cable systems during the local station audience rating period ("sweeps period") even though ABCs contract had expired. Time Warner Cable, Emergency Petition of ABC, Inc., Memorandum Opinion and Order, 15 F.C.C.R. 7882, 7886 (2000).
168. More generally, as Gawer and Henderson note, "if the entrant monopolist's incentive to engage in ex post price 'squeezes' is sufficiently strong, complementors may have no ex ante incentive to engage in innovation at all." Gawer & Henderson, supra note 111, at 5 (emphasis omitted).
169. Andrew Odlyzko arrives at a similar conclusion, suggesting that: [S]ome form of government intervention, to set the rules, is inevitable. (And at some point it may be welcomed by the players, just as government intervention was welcomed in the end by the railroads.) Society needs basic rules to operate by, and modern technology creates potential scenarios that old rules did not cover. But we need to remember that it is not easy to regulate markets, especially ones in cyberspace, and especially when policy makers labor under the burden of many false myths.
170. Odlykzo, supra note 97, at 12.
171. Farrell & Weiser, supra note 8, at 129 (describing concerns that include crosssubsidization, improper pricing of common carrier services, as well as related anticompetitive practices and activities).
172. Id. at 94 n.40, 105-07.
173. See Policy and Rules Concerning the Interstate, Interexchange Marketplace, Report and Order, 16 F.C.C.R. 7418, 7442 (2001) (mandating that providers must apply the same prices, terms, and conditions).
174. See Inquiry Concerning High-Speed Access to the Internet, Declaratory Ruling and Notice of Proposed Rulemaking, 17 F.C.C.R. 4798, 4825 (2002), available at http://hraunfoss.fcc.gov/edocs-public/attachmatch/FCC-02-77A1.pdf (detailing the underlying reasons behind the decision).
175. See Broadband Industry Practices, Notice of Inquiry, 22 F.C.C.R. 7894, 7894 (2007), available at http://fjallfoss.fcc.gov/edocs-public/attachmatch/FCC- 07-31A1.pdf (seeking examples of "beneficial or harmful behavior").
176. To offer a rough analogy, banning the offering of QoS guarantees for a fee would be akin to a ban on the post office's delivery of priority basis mail. Under such a ban, customers would be worse off insofar as all mail would only be delivered on a first class basis-or possibly on an improved basis that would cost more than today's first class mail. Indeed, some commentators analogize best efforts service to first class mail and QoS assurances (e.g., guaranteed delivery, no traffic loss, and delivery confirmation) to priority delivery. SeungJae Shin et al., A Progressive Analysis of Internet Market: From Best Effort to Quality of Service, 28 TELECOMM. POL'Y 363, 364 (2004). As for the argument that such a ban is consistent with an egalitarian vision of the Internet, that perspective fails to account for the economic inefficiency that such a ban would entail, as well as the reality that the Internet is already not an egalitarian medium (thanks to the availability of SLAs and caching services for those firms that can afford them).
177. See Michael K. Powell, Preserving Internet Freedom: Guiding Principles for the Industry, 3 J. ON TELECOMM. & HIGH TECH. L. 5, 11-12 (2004) (describing "Internet Freedom" as freedom to access content, use applications, attach personal devices, and obtain service plain information).
178. See Appropriate Framework for Broadband Access to the Internet over Wireline Facilities, Policy Statement, 20 F.C.C.R. 14,986, 14,988 (2005), available at http://hraunfoss.fcc.gov/edocs-public/attachmatch/FCC-05-151A1.pdf [hereinafter Internet Policy Statement] (listing the newly adopted principles to ensure accessibility of broadband networks).
179. See Madison River Communications, LLC, Consent Decree, 20 F.C.C.R. 4295, 4297 (2005), available at http://hraunfoss.fcc.gov/edocs-public/attachmatch/DA- 05543A2.pdf (providing that Madison River must neither block ports nor otherwise hinder customers from using VoIP).
180. More recently, the FCC again enforced the no blocking rule in the context of allegations that certain carriers were blocking telephone calls to a rural carrier believed to be participating in a "traffic dumping scheme." See Establishing Just and Reasonable Rates for Local Exchange Carriers, Declaratory Ruling and Order, 22 F.C.C.R. 11,629 (2007), availabe at http://hraunfoss.fcc.gov/edocs-public/attachmatch/DA-07-2863A1.pdf.
181. In particular, I outlined this model in Weiser, Toward a Next Generation, supra note 8, at 75-85.
182. Chairwoman Majoras made the point this way: All of these types of conduct-integration, prioritization, refusals to deal, and so forth-can be anticompetitive and harmful to consumers under certain conditions. What is often missed in the debate, however, is that they also can be procompetitive-capable of improving efficiency and consumer welfare, which involves, among other things, the prices that consumers pay, the quality of goods and services offered, and the choices that are available in the marketplace. An antitrust inquiry permits a determination of the net effects on consumer welfare before conduct is summarily condemned.
183. Majoras, supra note 91, at 12.
184. See Farrell & Weiser, supra note 8, at 112 (discussing nature of "finsyn" rules and their reform).
185. See Majoras, supra note 91, at 14 ("Despite the good intentions of their proponents, industry-wide regulatory schemes-particularly those imposing general, one-size-fits-all restraints on business conduct-may well have adverse effects on consumer welfare, as certain unintended consequences may not be known until far into the future.").
186. See Gawer & Henderson, supra note 111, at 26 (explaining, based on their study of Intel's behavior, that "foreclosing entry by third parties to the system almost certainly reduces consumer welfare," but, at same time, it is important not to preclude entry by platform providers as allowing "some entry by [platform] monopolists is almost certainly beneficial").
187. As Shane Greenstein put it, "[n]o market participant knows the best option for creating and delivering economic value, so it is in society's interest to have both broadband carriers and others conduct directed economic experiments" in terms of what applications should be developed. Shane Greenstein, Economic Experiments and Neutrality in Internet Access 42 (Nat'l Bureau of Econ. Research, Working Paper No. 13,158, 2007), available at http://www.nber.org/papers/w13158. In short, the emphasis on allowing platform provider entry into applications markets follows from the ICE principle that explains how platform providers have a vested interest in the development of valuable applications and why, absent any exceptions to the principle, the decision by a platform provider to integrate into the applications market is likely to reflect the desire of a platform provider to encourage the development of new applications.
188. See Farrell & Weiser, supra note 8, at 100-05.
189. See Gawer & Henderson, supra note 111, at 2 (noting the "very scant empirical work in the area" and even a relatively minimal theoretical investigation of the complex set of incentives that bear upon the conduct of platform providers).
190. Marco Iansiti & Greg Richards, Creative Construction: Assimilation, Specialization, and the Technology Life Cycle (forthcoming 2008) (manuscript at 21, available at http://www.law.gmu.edu/events/innovationforum/papers/iansiti. pdf).
191. See WILLIAM J. BAUMOL, REGULATION MISLED BY MISREAD THEORY 6 (2006), available at http://aei-brooldngs.org/adrnin/authorpdfs/redirect-safely.php? fhame=../pdffiles/ php3x.pdf (noting that highly competitive markets can result in discriminatory pricing as a superior strategy for recovering costs, but that such discrimination does not signify market power sufficient to trigger antitrust issues).
192. Farrell, supra note 45, at 199-200.
193. As a newspaper account noted, this decision can be viewed both as a "desperate move" to "defend their voice revenue" as well as an attempt to protect their ability to subsidize the handsets through a predictable stream of voice revenue. Bill Ray, Orange and Vodafone Cripple Nokia's Flagship, THE REGISTER, Apr. 18, 2007, available at http://www. theregister.co.uk/2007/04/18/n95-crippled/print.html.
194. A considerable reason for this difficulty is that the state of economic learning on price discrimination arrangements in practice is still evolving. As former FTC Chairman Tim Muris put it, "more research is needed concerning how to identify price discrimination that raises competitive concerns." Timothy J. Muris, Chairman, FTC, Remarks at the George Mason University Law Review's Winter Antitrust Symposium: Improving the Foundations of Competition Policy (Jan. 15, 2003), available at http://www.ftc.gov/ speeches/muris/ improveconfoundatio.htm.
195. As Andrew Odlyzko points out, even the old common carrier rules did not bar all forms of price discrimination, allowing, for example, "reasonable discrimination," such as student or senior citizen discounts. Odlyzko, supra note 97, at 8.
196. Howard A. Shelanski, Network Neutrality: Regulating with More Questions than Answers, 6 J. ON TELECOMM. & HIGH TECH. L. 23, 34 (2007).
197. As Justice Breyer recently explained: [L]aw, unlike economics, is an administrative system the effects of which depend upon the content of rules and precedents only as they are applied by judges and juries in courts and by lawyers advising their clients. And that fact means that courts will often bring their own administrative judgment to bear, sometimes applying rules of per se unlawfulness to business practices even when those practices sometimes produce benefits.
198. Leegin Creative Leather Prods., Inc. v. PSKS, Inc., 127 S. Ct. 2705, 2729 (2007) (Breyer, J., dissenting).
199. As Shane Greenstein explained, "Particularly worrisome are situations where carriers take actions that are privately beneficial-either to protect existing markets or related commercial investments and relationships-and have the consequence of reducing the incentives of other firms to conduct economic experiments that could create value." Greenstein, supra note 143, at 40.
200. The 700 Mhz Auction: Public Safety and Competition: Hearing Before the S. Comm. on Commerce, Sci., and Transp., 110th Cong. 9 (2007) (written statement of Amol R. Sarva, Wireless Founders Coalition for Innovation), available at http://commerce .senate.gov/public/-files/Testimony-AmolSarva- SarvaWrittenStatement0.pdf.
201. Teresa von Fuchs, T-Mobile Launches Wi-Fi Phone Service, WIRELESSWEEK, June 27, 2007, http://www.wirelessweek.com/article.aspx?id=149816.
202. The focus on legacy revenues, as Clayton Christensen has explained, underscores why outside upstarts and not incumbent providers develop many significant innovations- such as modems, answering machines and speakerphones in telecommunications. CLAYTON M. CHRISTENSEN, THE INNOVATOR'S DILEMMA 61 (1997).
203. In the wireless context, the introduction of the iPhone underscored both (1) the potential for outside innovators to find a platform and thereby disrupt traditional business models, as well as (2) the resistance, even in a relatively competitive market, of incumbent providers to allowing truly disruptive applications. As one technology commentator noted: How much and [how] quickly incumbent networks operators will be willing to give up the assurance of revenues derived from captive control of cellphone services versus how much they can capitalize on the popularity of new services is galvanized by [the] conclusion that a shift to open IP environment is inevitable. If incumbent operators strongly resist the shift [to open development using Internet technology], independent operators will have a more open field to exploit the pentup interest of consumers as demonstrated by the iPhone.
204. What is most compelling about [the] iPhone is that this is simply an opening volley which signals ability for outside players to bring compelling products to market that take advantage of PC and Internet developments.
205. Robert Syputa, Clash of the Titans: What Is Really Different About the Apple iPhone, MARAVEDIS, http://www.maravedis-bwa.com/article-6.html (last visited Mar. 27, 2008).
206. See Sascha Segan, Verizon's Open Network Has Eyes on the Future, PC MAGAZINE.COM, NOV. 27, 2007, http://www.pcmag.com/article2/0,2704,2222863,00.asp (concluding that Verizon's announcement reflects the reality in the wireless arena that the industry is moving "inexorably towards a world where 'cell phone' is a feature, not a product, and cellular networks are ISPs, not all-controlling masters of your wireless destiny").
207. See NUECHTERLEIN & WEISER, supra note 8, at 428-29 (suggesting that the FCC's role be limited to remedying anticompetitive conduct rather than taking proactive initiatives);
208. see also Shelanski, supra note 32, at 101-02 (recommending an "ex post enforcement regime" because some conduct may have a beneficial effect on consumers).
209. MCI Commc'ns Corp. v. AT&T, 708 F.2d 1081, 1150 (7th Cir. 1983).
210. See, e.g., Multistate Legal Studies, Inc. v. Harcourt Brace Jovanovich Legal & Prof 1 Publ'ns, Inc., 63 F.3d 1540, 1553 n.12 (10th Cir. 1995) (condemning conduct that raises rivals' costs without the demonstration of "a legitimate business justification" for the conduct in question as anticompetitive).
211. 540 U.S. 398, 412 (2004).
212. FTC Chairwoman Majoras made the case for the effectiveness of antitrust law as "well-equipped to deal with the competitive issues raised in the net neutrality debate." Majoras, supra note 91, at 11. In particular, she suggested that "[t]hese competitive issues are not new to antitrust law, which is general, flexible, and able to analyze potential conduct and business arrangements involving broadband Internet access, just as it has been able to deal with such conduct and arrangements across many diverse markets."
213. Id. Commissioner Jon Leibowitz, by contrast, suggested that "while antitrust may be a good way of thinking about [consumers' 'Internet Freedoms'], it is not necessarily well-suited to protecting them." Leibowitz, supra note 118, at 1. In particular, he noted that "there is little agreement over whether antitrust, with its requirements for ex post case by case analysis, is capable of fully and in a timely fashion resolving many of the concerns that have animated the net neutrality debate."
214. Id. at 3.
215. See ANTITRUST MODERNIZATION COMM'N, REPORT AND RECOMMENDATIONS 22, 340, 360 (2007), available at http://govinfo.library.unt.edu/amc/report- recommendation/ toc.htm (deeming Trinko merely a refusal-to-deal case that "does not displace the role of antitrust laws in regulated industries").
216. See Philip J. Weiser, The Relationship of Antitrust and Regulation in a Deregulatory Era, 50 ANTITRUST BULL. 549, 587 (2005) (concluding that regulatory regimes have limitations that necessitate judicial oversight under antitrust law).
217. See Christopher S. Yoo, What Can Antitrust Contribute to the Network Neutrality Debate?, 1 INT'L J. COMM. 493, 528 (2007), available at http://lsr.nellco.org/upenn/wps/ papers/163/ ("It is too early to determine which of these various readings of Trinko will ultimately prevail and whether the level of oversight undertaken by the FCC is sufficient to forestall antitrust enforcement.").
218. In its recent decision in Credit Suisse Securities (USA) LLC v. Billing, however, the Court suggested that the narrow reading of Trinko may well be correct, concluding that antitrust oversight was inappropriate in the securities law context because the Securities and Exchange Commission (SEC) possessed authority to police the relevant conduct, and there was "evidence that the responsible regulatory entities exercise[d] that authority." 127 S. Ct. 2383, 2392-93 (2007) (noting the SECs "active and ongoing exercise of that authority"). To be sure, it is still plausible that a nominal "exercise of regulatory authority"-such as considering whether there is a problem-could displace antitrust oversight. But the mere possession of authority does not appear to be sufficient to do so.
219. Reconsidering Our Communications Laws: Ensuring Competition and Innovation: Hearing Before the S. Comm. on the Judiciary, 109th Cong. (2006) (written statement of Blair Levin, Managing Director, Stifel, Nicolaus & Co., Inc.), available at http://judiciary .senate.gov/print-testimony.cfm?id= 1937&wit-id=5421.
220. On the importance of enabling entry in the first place, see id. As to the innovation costs of ex post opportunism, see Greenstein, supra note 143, at 41 (noting the concern that "the bargaining costs of making deals with carriers after demonstrated success will interfere with the incentive to innovate in the first place"). On the more broad issue of discouraging innovation, Shane Greenstein summed up the concern as follows: Seen through the lens of economic experiments, there are two concerns. First, a carrier can use pre-innovation contracting to generate market conditions that limit entry of innovative content providers. Second, carriers can use post-innovation bargaining to strategically aid their competitive position. There are a variety of reasons why both of these are a general concern, because the carriers may intend to imitate content providers, may intend to compete through provision of their own service, or may intend to compete with alliance with another content provider. And there are a variety of ways for a carrier to take such action.
221. Id.
222. Edward W. Feiten, Nuts and Bolts of Network Neutrality, 6 J. ON TELECOMM. & HIGH TECH. L. (forthcoming 2008) (manuscript at 3, available at http://itpolicy.princeton.edu/pub/neutrality.pdf).
223. See C. Scott Hemphill, The New Common Carriage: Foreclosure, Extraction, and Zero-Price Regulation, 26 YALE J. ON REG. (forthcoming 2008) (manuscript at 41-44, on file with author) (addressing value of network neutrality regulation to peer production). The Center for Democracy & Technology elaborated on this concern: The history of the Internet has been marked by numerous examples of new technologies-such as instant messaging or web-based video-that emerge from humble beginnings but then become extremely popular. The "next big thing" might never have a chance to develop and become popular if the approval and cooperation of several top broadband access providers were to become a prerequisite to widespread use. The pace of innovation that has been the hallmark of the Internet could slow substantially.
224. Broadband Industry Practices, Reply Comments of the Center for Democracy & Technology, WC Docket No. 07-52 (July 16, 2007), available at http://fjallfoss.fcc.gov/ prod/ecfs/retrieve.cgi?native-or-pdf=pdf&id- document=6519558029.