Summary of Findings

My topic is the impact of Net Neutrality on E-commerce from the consumer and producer perspectives.

When we look at net neutrality from the consumers side we see the need for equal access to information as well as equal speed of access to these materials.  In order to increase overall consumer welfare there needs to be no obstacles to accessing information or the speed at which this information is accessed.  ISPs attempt to obtain competitive advantage by inhibiting access to their networks or over their networks by consumers of alternate ISPs.  In response other ISPs do this in order to compete, leading to a competition based upon network effects that results in lower consumer welfare as a whole and a more complex, congested network.  Free access to information and data speeds is essential to promoting growth in the industry and in modern society.

From the producers perspective we see net neutrality concerns arising from heavy bandwidth usage as well as usage for services that compete with ISPs or their partners.  High bandwidth usage services are often the victims of limiting by ISPs in an attempt to speed up their networks.  This leads to issues of packet priority and essentially, a non-neutral network.  This non-neutral network adds extra barriers to entry and anti-competitive obstacles to the industry and the well established ISPs have the ability to block out smaller start ups hoping to utilize the already existing infrastructure of these ISPs.  When we look at competing services we see similar problems.  ISPs can easily provide their services with as much bandwidth as needed, while limiting competitors bandwidth availability or the speed at which their packets travel over their network.  In an industry that relies on how fast you can deliver content, these restrictions can create a significant anti-competitive advantage for established ISPs over new entrants and less capital intensive companies.

I plan to dig deeper into these two areas while also looking at what regulations are in place, or should be in place to help create a more neutral net.  I also hope to investigate the impact of existing companies who have a business model centered around supplying faster data access by consumers to producers content through the use of advanced and strategically placed server systems that most companies wishing to start up an e-business do not have access to.