Martin Cave & Ingo Vogelsang, March 20, 2016
Net neutrality has been an issue that has preoccupied consumers, firms and regulators over the past decade. It concerns the financial and qualitative terms on which unaffiliated content and application providers (“CAPs”) may have their content delivered by the local access provider or Internet Service Providers (“ISPs”). The paper discusses the terms of this debate in the European Union and the United States. Broadly, the same view is taken in each jurisdiction of anticompetitive conduct by ISPs, such as discriminatory blocking of rival content, but the question whether ISPs should be entitled to make differential charges to CAPs for different tiers of delivery services, though nominally resolved in each jurisdiction, remains in dispute. The basic economics underlying this conflict are exposed, and intermediate solutions are examined.