A ‘Most Favored Nation’ Approach to an Open Internet

Posted by Social Science Research Network

A ‘Most Favored Nation’ Approach to an Open Internet – Jon M. Peha (Carnegie Mellon University)

ABSTRACT: It is important for the Commission to establish new Open Internet rules. However, the proposed rules that set a minimum level of access and allow unlimited negotiation beyond that minimum will not protect the Open Internet. The NPRM’s proposal to maintain the “specialized services” loophole is also a potential threat to an Open Internet. However, the NPRM is right not to prohibit all forms of priority, as priority can benefit Internet users. This paper proposes an alternative “most favored nation” approach, wherein arrangements between Internet access providers and content or application service providers must be public under transparency rules, and a content or application service provider is empowered under the “commercial reasonableness” standard to demand any arrangement that an Internet access provider has previously offered to another similarly situated entity. This policy would particularly benefit new entrepreneurial ventures. The Commission should simultaneously establish limits on the definition of “specialized services” to close loopholes in the 2010 rules that could allow the worst forms of “pay for priority,” and the Commission should broaden its definition of “pay for priority.” This most-favored-nation policy would protect the Open Internet far more effectively than the rules proposed in the NPRM, and the Commission has sufficient authority under either Section 706 or Title II. The Commission should also begin collecting more information on interconnection, without directly regulating the quality or price of interconnection.