@BusinessDaily

WATIMA: What Kenya can learn from net neutrality debate in

12 months ago, 1 Jan 19:00

By: Tony Watima

In the close of last week, the global internet world was abuzz after Federal Communications Commission in the US, equivalent to the Communications Authority in Kenya, in a 3-2 vote, repealed the net neutrality policy — a set of new rules governing US internet service providers not to block or downgrade lawful web content, nor offer preference to content over others through differential pricing. For example, if a provider of video programming wants to ensure that its customers receive its content quickly and so wants to purchase faster internet service from network providers, the video programming provider should not be allowed to buy this enhanced access because it will tilt the playing field since competitors, mostly new innovators, who can’t pay for the same access will be pushed to slower connections. This set of new rules achieved what’s often called network neutrality or net neutrality — a term coined by Columbia Law Professor Tim Wu in his 2002 paper, Network Neutrality, Broadband Discrimination which the Obama administration pushed for arguing that it will bring certainty and predictability to the broadband economy. The main justification for net neutrality regulation laws is to prevent harm to consumers and economists look at it in two different ways. First, from the economic structuralism perspective, those who advocate for net neutrality believe that the internet is a public good and people are entitled to have a “neutral” provision of information over the internet because the internet was designed to be neutral. Therefore, it’s necessary for government to fix prices because without such regulation a relatively small number of internet service providers will become managers of the internet with a “monopolistic” voice that overrides public interest. This public interest theory in regulation is always popular because most people believe that regulation is costless to society and that’s how the world should work since it’s assumed to carry no extra-cost. Second, from the economic liberal’s perspective who advocate for the repeal on net neutrality say the debate is basically a competition economic issue on whether price discrimination should be allowed or not? As far as they are concerned, net neutrality is simply a price-fixing issue impeding infrastructure deployment because growth in demand for bandwidth-intensive applications such as streaming videos like Netflix or online gaming require vast capital investment but internet providers are not willing to take the chance since the prices are fixed and they might fail to recoup their costs. At the same time, these bandwidth-intensive applications are sensitive to delay and this congestion leads to degradation of service for all internet users. So the price-fixing is a heavy cost to the netizens since the sector is denied quality services due to lack of incentive to always improve it. Therefore, the solution is for internet providers be entitled to freedom to manage their own networks without government interference, which means the right to set prices using surge pricing model where they can charge web content providers such as Yahoo!, eBay, Youtube, Netflix according to an increase ...
Read More


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WATIMA: What Kenya can learn from net neutrality debate in

12 months ago, 1 Jan 19:00

By: Tony Watima
In the close of last week, the global internet world was abuzz after Federal Communications Commission in the US, equivalent to the Communications Authority in Kenya, in a 3-2 vote, repealed the net neutrality policy — a set of new rules governing US internet service providers not to block or downgrade lawful web content, nor offer preference to content over others through differential pricing. For example, if a provider of video programming wants to ensure that its customers receive its content quickly and so wants to purchase faster internet service from network providers, the video programming provider should not be allowed to buy this enhanced access because it will tilt the playing field since competitors, mostly new innovators, who can’t pay for the same access will be pushed to slower connections. This set of new rules achieved what’s often called network neutrality or net neutrality — a term coined by Columbia Law Professor Tim Wu in his 2002 paper, Network Neutrality, Broadband Discrimination which the Obama administration pushed for arguing that it will bring certainty and predictability to the broadband economy. The main justification for net neutrality regulation laws is to prevent harm to consumers and economists look at it in two different ways. First, from the economic structuralism perspective, those who advocate for net neutrality believe that the internet is a public good and people are entitled to have a “neutral” provision of information over the internet because the internet was designed to be neutral. Therefore, it’s necessary for government to fix prices because without such regulation a relatively small number of internet service providers will become managers of the internet with a “monopolistic” voice that overrides public interest. This public interest theory in regulation is always popular because most people believe that regulation is costless to society and that’s how the world should work since it’s assumed to carry no extra-cost. Second, from the economic liberal’s perspective who advocate for the repeal on net neutrality say the debate is basically a competition economic issue on whether price discrimination should be allowed or not? As far as they are concerned, net neutrality is simply a price-fixing issue impeding infrastructure deployment because growth in demand for bandwidth-intensive applications such as streaming videos like Netflix or online gaming require vast capital investment but internet providers are not willing to take the chance since the prices are fixed and they might fail to recoup their costs. At the same time, these bandwidth-intensive applications are sensitive to delay and this congestion leads to degradation of service for all internet users. So the price-fixing is a heavy cost to the netizens since the sector is denied quality services due to lack of incentive to always improve it. Therefore, the solution is for internet providers be entitled to freedom to manage their own networks without government interference, which means the right to set prices using surge pricing model where they can charge web content providers such as Yahoo!, eBay, Youtube, Netflix according to an increase ...
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