When consumers want their traffic to be throttled

[Commentary] One of the starting assumptions for the Open Internet order is that blocking, throttling, and paid prioritization are unilateral actions imposed by Internet service providers to maximize their own positions and will be necessarily harmful to consumer and application provider welfare. Consumer-directed blocking and throttling may be questionable in the US, but the practice is alive and well in New Zealand – one of the OECD countries where no specific position on traffic management has been enshrined in regulations.

The case for selective throttling is an easy one: Internet users are extremely heterogeneous consumers with extremely heterogeneous tastes for Internet content. In a world of heterogeneity, the best way to increase both consumer and total welfare is to allow the development of customized products and prices tailored to differing preferences. Just as consumers can create a better overall experience using selective throttling, so it is possible to imagine plenty of scenarios where content providers or network operators can do the same. Unfortunately, the network neutrality rules seem to take options like these off the table – even before they have been articulated or explored – and instead offer only a strict one-size-fits-all Internet experience. It behoves regulators and net neutrality advocates to remember that, just as with other examples of heterogeneity, perfectly equal treatment may create outcome inequalities that intelligently applied positive discrimination – understanding and catering to individual differences – can ameliorate.

[Bronwyn Howell is a faculty member at the School of Management, Victoria University of Wellington, New Zealand.]