“Kevin Drum”:http://www.washingtonmonthly.com/archives/individual/2006_04/008682.php complains that

bq. I’ve been trying to understand this whole “net neutrality” thing and I’ve failed utterly. I just can’t figure out the underlying issues.

Duncan Black tells him “not to be an idiot”:http://atrios.blogspot.com/2006_04_23_atrios_archive.html#114593357022853905. But Kevin has a point – the network neutrality debate isn’t quite the no-brainer that it might seem to be at first. There are different kinds of discrimination that might occur, some of which are straightforward to regulate, some not so straightforward. See further, Ed Felten’s “two”:http://www.freedom-to-tinker.com/?p=983 “part”:http://www.freedom-to-tinker.com/?p=986 primer on the topic, and his two “follow up”:http://www.freedom-to-tinker.com/?p=989 “posts”:http://www.freedom-to-tinker.com/?p=995 on the topic, which provide by far the most accessible overview of the underlying technical issues that I’ve read. One very interesting argument which emerges from Felten’s series of posts is his suggestion that a move away from network neutrality might have damaging consequences for the _sociological_ underpinnings of cooperation over resource sharing.

bq. [endpoint computers] deduce that the network is congested. So they will re-send the dropped packet, but in response to the probable congestion they will slow down the rate at which they transmit data. Once enough packets are dropped, and enough computers … One interesting aspect of this system is that it is voluntary — the system relies on endpoint computers to slow down when they see congestion, but nothing forces them to do so. … there is an incentive to defect from this deal. Suppose that you defect — when your packets are dropped you keep on sending packets as fast as you can … By ignoring the congestion signals you are getting more than your fair share of the network. … Despite the incentive to defect, most people keep the deal by using networking software that slows down as expected in response to congestion. … there is a sort of social contract … One of the reasons users comply, I think, is a sense of fairness. If I believe that the burdens of congestion control fall pretty equally on everybody, at least in the long run, then it seems fair to me to slow down my own transmissions when my turn comes. … But now suppose that the network starts singling out some people and dropping their packets first. … the incentive for those machines and applications to stick to the social contract and do their share to control congestion, will weaken. Will this lead to a wave of defections that destroys the Net? Probably not, but I can’t be sure. … We should also listen to the broader lesson of this analysis. If the network discriminates, users and applications will react by changing their behavior. Discrimination will have secondary effects, and we had better think carefully about what they will be.

This seems to me to make sound sociological sense – one of the reasons that the system works as well as it does at the moment is because there’s a set of norms governing behaviour, and a sense that the costs of obeying these norms are, to use Robert Sugden’s terminology, cross-cutting so that they fall on everyone equally in the long run (Sugden has an apposite analysis of norms governing which car crosses a one lane bridge first). If we undermine the basic sense of rough equality in burden sharing, we’re likely going to weaken (and possibly destroy) these norms. There’s a general (and in this case, I believe entirely sound) sense that network neutrality has worked to date, and that we shouldn’t try to fix it. Felten’s analysis helps us move beyond this intuition to a more coherent analysis of what the costs of regulatory change might be.

Update: “Duncan replies here”:http://atrios.blogspot.com/2006_04_23_atrios_archive.html#114596726044778822, saying “Henry says I’m wrong to think this net neutrality issue is a no-brainer and then proceeds to outline one of the many reasons it is, in fact, a no-brainer.” This misses the point I was trying to make. Even assuming that you agree that network neutrality is a good and wonderful principle of regulation, it’s not clear how best to regulate so as to make sure that it’s achieved in practice. Felten makes this clear in his discussion of the tricky ways that telcos might undermine network neutrality through apparently neutral technical decisions. This makes for complicated regulatory problems. Two pertinent examples. First, the DoJ action against Microsoft – I suspect that most people other than the hacks and the Chicago school true believers now accept that Microsoft was a bloated and abusive monopoly – but that’s the easy part. Figuring out how to regulate it successfully is considerably harder; there aren’t any very obvious solutions (my preferred solution would have been the “Zittrain one”:http://papers.ssrn.com/sol3/papers.cfm?abstract_id=174110 but it would have turned the copyright system upside down). Second, efforts to unbundle the local loop in Europe – i.e. to allow new entrants to compete effectively with dominant telcos in providing broadband. This was great in principle – but in practice proved more or less impossible to implement (the dominant telcos proved adept at exploiting loopholes in the regulation to hobble their competitors). Finally, the whole point of the Felten argument that I quoted from is that the effects on exchange of information on the Internet _aren’t_ a no-brainer. We can predict that changing the status quo will have consequences for actors’ behaviour, and we can make a good guess that the consequences will be negative. But without working through these consequences carefully, we don’t know what’s likely to happen. The Felten argument happens to accord with my intuitions on this – but my (and others’) intuitions have been known to be wrong on the past, which is why working through the arguments is important. And Felten’s argument was surely non-obvious to me before I read it – perhaps because I’m an idiot too. None of this detracts from the fact that the legislation under discussion is almost certainly a revolting give-away to lobbyists – but the underlying issues involved make for complicated debates and complications of implementation.