Net neutrality: What the economics says

[Commentary] Recently a small group of economists (I was one) summarized the economic research on network neutrality and Title II. Limiting ourselves to economics articles in the top 300 journals and that used explicit economic models, we reviewed the answers to four basic questions:

• How would regulations restricting ISPs from offering enhanced network features, such as fast lanes, to content providers affect (a) total welfare, (b) network investment, and (c) the variety of content on the internet and content provider investment? (Note: “Total welfare” is value that consumers receive from what they purchase minus the cost of providing the products.)
• How would prohibitions on network termination fees affect total welfare?
• How would prohibiting ISPs from blocking content affect total welfare?
• Are ISPs like the telecom companies for which Congress wrote Title II?

Here is what we found, but in my own words. 1) The effects of restricting enhanced network features on welfare, ISP investment, and content depend on market conditions. 2) It appears that termination fees could be harmful when ISPs compete for providing access to content providers and an ISP would charge content providers that do not directly connect with the ISP. Otherwise, termination fees are helpful. 3) Blocking is harmful. 4) Economic research today supports the idea that internet services are quite important but has not found that ISPs have the monopoly power contemplated when Title II was created.