Document Actions

How Network Neutrality Promotes Innovation

ComputerWorldUK - Glyn Moody - As I've pointed out many times in previous posts, one of the key benefits of mandating network neutrality is that it promotes innovation by creating a level playing field. Such statements are all very well, but where's the evidence? An important new study entitled "The innovation-enhancing effects of network neutrality" [.pdf], commissioned by the Dutch Ministry of Economic Affairs from the independent SEO Economic Research unit provides perhaps the best survey and analysis of why indeed network neutrality is so beneficial:

The Ministry of Economic Affairs asked SEO Economic Research to describe what the essential economic mechanisms are through which network neutrality fosters innovations by new and small innovators. The results presented in this study are based on desk research, primarily on findings in the blooming economic literature on network neutrality.

Here's the central result:

Traffic management in best-effort routing, such as payments for priority lanes and blocking competing services and applications, reduces competition between ISPs and increases the entry barriers for CAPs [content and application providers], in particular for small CAPs.

Here's one reason why: