Non-Discrimination of Just Non-Sense: A Law and Economics Review of the FCC’s New Net Neutrality Principle
Phoenix Center
Perspectives
George S. Ford, PhD
Lawrence J. Spiwak, Esq.
March 24, 2010

Ford and Spiwak analyze the proposed new Net Neutrality rule in the FCC’s Proposed Rulemaking for the “Open Internet”. The rule is commonly referred to as the “bright line non-discrimination rule”.  The authors argue that this rule does not work with the concepts of discrimination found in “economic literature and established communications jurisprudence”.  They believe that initially a determination of what discrimination is will be of vital importance.

The authors contend that an examination of discrimination within the study of economics is defined as “when different prices are charged different customers for the same commodity.”  In the legal arena, discrimination is determined by a three step process: “(1) whether the services are ‘like’; (2) if they are ‘like,’ whether there is a price difference; and (3) if there is a difference, whether it is reasonable.”  However, instead of staying with the accepted definitions of discrimination, the FCC has re-defined the issue as, “Subject to reasonable network management, a provider of broadband Internet access service must treat lawful content, applications, and services in a nondiscriminatory manner.”  Because standard services and prioritized services are not “like” then the offering of both services is not discriminatory based on the accepted economic and legal definitions.

The authors conclude that because the FCC has blatantly ignored the accepted standard of what discrimination is defined to be in both economic and legal circles and additionally ignored their own previous interpretations of discrimination we are faced with a pending bright-line rule that “lacks analytical legitimacy.”

You can find the full article here.