Report Critiques Net Neutrality Assumptions

Published January 1, 2007

A new report warns network neutrality would legislate an outmoded Internet business model, hurting users and businesses because it would relegate service provider networks to a role of “dumb pipes” prohibited from adding any quality, value, or intelligence to Web-based services.

The Myth of Network Neutrality and What We Should Do About It, a 14-page paper by Robert W. Hahn and Robert J. Litan, co-founders and directors of the AEI-Brookings Joint Center, traces the development of the network neutrality argument to early Internet architectures, particularly the “end-to-end principle,” where much of the network intelligence and functionality was largely placed at the “edge” of the network in routers, servers, and PCs.

While the model may have made sense at one time, given the capabilities of carrier networks, Hahn and Litan warn that instituting what would amount to a legal ban on the introduction of intelligence or quality algorithms into carrier networks is costly and counterproductive to users and enterprises alike.

Developing the Internet

“Access providers are in the midst of a multi-billion-dollar campaign to upgrade their networks using a mixture of capacity expansion and electronic enhancements to carry broadband content, including multiple HDTV signals,” the authors write. “Under net neutrality regulation, access providers would be forced to meet this growing demand with increases in capacity only, which is a very costly solution for both access providers and their subscribers.”

The authors disagree with network neutrality proponents who say all of the Internet’s development can continue at the edges, and that giving carriers the right to offer quality control would open the door to content and applications discrimination. This is a matter of supposition supported by no evidence, the authors argue, and equally strong, if not stronger, cases can be made for the innovation that might occur if carriers are allowed to add further value to content and applications as they move across the network.

“In particular, [net neutrality proponents] argue that content providers will refrain from engaging in innovative activities due to the fact that access providers have the ability to discriminate against content providers on the basis of type of application,” Hahn and Litan contend. “This may sound reasonable, at first blush, but it misses the fact that innovation among content providers does not appear to be slowing. The popularity of online search algorithms created by Yahoo and Google has given way to upstart social networks like MySpace and YouTube. Those who attribute the boom in innovation solely to the Internet’s end-to-end nature have not made their case. The Internet is not end-to-end now and was never designed to be strictly neutral.”

Steven Titch ([email protected]) is senior fellow for IT and telecom policy at The Heartland Institute and managing editor of IT&T News.

For more information …

The Myth of Network Neutrality and What We Should Do About It is available through PolicyBot™, The Heartland Institute’s free online research database. Point your Web browser to and search for document #20301. The paper is also available on the Web site of the AEI-Brookings Joint Center at