Do conduit neutrality mandates promote or hinder trust in Internet-mediated transactions?
Introduction
As the Internet evolves and matures, Internet Service Providers (“ISPs”) have begun to create increasingly diversified business models that deviate from plain vanilla, one-size fits all terms and conditions. The substantial cost in accommodating subscriber demand for fast broadband connections necessitates ISP efforts to diversify service offerings on the basis of subscriber bandwidth requirements and other customer-specific demand characteristics. ISPs have identified new strategies to differentiate their offerings on the basis of price, quality of service, transmission speeds, permissible amount of capacity uploaded and downloaded, legitimate network management objectives and the demand for customer-specified network features.
Changing market conditions support ISP efforts to customize service, but the technical means used to achieve this goal have proven controversial. Advocates for restricting price and service discrimination contend that absent a “network neutrality”1 mandate, ISPs will use techniques to discriminate in ways that harm competitors by favoring the content of corporate affiliates and selected third parties. Network neutrality supporters claim that ISPs have both the incentive and ability to engage in harmful discrimination, typically framed as necessary network management, or a legitimate response to the specific requirements of a customer.
In addition to the debate about what ISPs can do to manage their networks and provide service enhancements is the issue of whether and how ISPs can avoid liability for harms resulting from their carriage of content. In the United States ISPs can avoid liability for their carriage of harmful content generated by others2 as well as copyright infringing content.3 To qualify for these free from liability “safe harbors,”4 an ISP need only eschew the use of network management techniques so that it can claim to operate as a neutral conduit. ISPs that do not induce copyright infringement by subscribers, or lack knowledge that a subscriber has engaged in copyright infringement, will not incur secondary liability in the United States.5 The Digital Millennium Copyright Act creates incentives for ISPs to refrain from actively managing their networks, or to install techniques that would support digital rights management.
This article will consider ISP conduit neutrality in the context of whether and how legislatures and national regulatory authorities can enhance trust and network reliability. It first will assess how conduit neutrality impacts trust and how network management techniques can offer both quality of service improvements and deliberately inferior service. Because technological innovations provide the ability to build trust in Internet-mediated transactions, it will subsequently use as a case study legislative and regulatory strategies in the United States. The article will argue that these strategies have largely failed to provide lawful and flexible procedures that promote network management and competition without stifling innovation or creating disincentives for ISPs implement ways to enhance consumer trust in cloud computing,6 electronic commerce and other transactions.
The U.S. case study will identify the harms resulting from a process that combines likely regulatory overreach with an apparent inability for stakeholders to compromise. The article will suggest that absent better ways to anticipate and resolve conflicts the U.S. may suffer from a legal and regulatory environment that stifles innovation and incentives for ISPs to implement techniques that can enhance greater user trust in Internet transactions. Finally, it will recommend that nations implement flexible administrative mechanisms for dispute avoidance and resolution.
Section snippets
How conduit neutrality impacts trust
In a nutshell the advocates for network neutrality in the United States7
U.S. laws and regulations have adversely impacted trust
The United States may provide a case study in how well intentioned concerns about open Internet access and conduit neutrality can adversely impact the level of trust consumers have toward the Internet. In the worst case scenario the FCC's network neutrality rules may create disincentives if not penalties for network management tactics that may promote trust, but also facilitate unreasonable discrimination. Additionally legislatively conferred safe harbors from liability for the carriage of
The way forward
National Regulatory Authorities, such as the FCC, face a daunting quandary in calibrating the scope of Internet oversight and intervention. A hands-off approach, consistent with the view that the Internet has thrived in the absence of government meddling, risks giving ISPs unfettered opportunities to act on the incentive and ability to engage in anticompetitive and discriminatory practices. When and if an ISP tilts the competitive playing field in its favor, consumers may have difficulty
Rob Frieden ([email protected]) Pioneers Chair and Professor of Telecommunications and Law, College of Communications, Penn State University, web site: http://www.personal.psu.edu/faculty/r/m/rmf5/.
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Rob Frieden ([email protected]) Pioneers Chair and Professor of Telecommunications and Law, College of Communications, Penn State University, web site: http://www.personal.psu.edu/faculty/r/m/rmf5/.