Noam asks for policy prescriptions.

Peha:  You're vulnerable to regulatory action if, when you have market power, you (eg) charge more for VOIP than for video.

Bauer:  I don't have an explicit welfare component to my paper.  My suggestion is that it would be a bigger mistake to adopt specific network neutrality rules and then decide we don't need them.  Congress should enable the FCC to adopt rules if needed. And don't prohibit municipalities to invest in broadband.

Lehr:  All versions of NN rules I've seen are bad.  We need general legislation (if we can craft it) that shows intent of what we're trying to do, and then have agency (without full discretion) enforce it.  Ex post alone is inadequate.  Trying to make the problem go away will help -- reform spectrum, don't block creative efforts by end-users.  Trying to design a framework for future is important.

Nachbar:  I'm in favor of bad legislation (joke!).  This NN problem is different because usually we don't mandate design in access fights.  That's the primary risk that we face here.  With a product like this, design is everything.  You can discriminate much more easily here than you could have with railroads.  So I'm more concerned about forms of discrimination here that are possible.  I think a strong non-discrimination norm enforced by standards would be a good idea.  And ex post is better.

Question:  old problems, new players, Noam has said.  Why don't we see differences in pricing here?

Lehr: We do need to see more price discimination.  We have a coordination problem here. 

Peha:  We have a choice from a tech perspective.  We can discriminate based on packet inspection etc. or you could throw capacity at the problem.  We did that in the 1990s.  Maybe we'll do that in the future.

Question:  What about consumer switching? won't people just migrate ISPs if there are discrimination issues? (from Martin from BT)

Lehr:  If you have competition, sure.  But switching costs can still be there.

Question:  What about just paying by bits or by service?

Peha:  That's technically possible, sure.  If the question is how to set the price, that's a hard problem.  That's what we're trying to figure out.

Question:  Assumption here is that pipe people can tax content providers. Cable systems show us that they have to pay more each year to content providers.  Why do you assume this is different?

Question:  In Netherlands, program providers PAY cable for access to the network.

Question:  What about looking toward the future -- barriers to entry for future entrants that won't have capital?

Question:  Market power is a necessary but not sufficient element for regulation.  What's the market definition?  And for content providers, they have a national market? shouldn't we look at national market from broadband access? (this from Yoo).

Question:  Innovation from IP is the most important -- not at platform level, which is like ISDN.

Question: Do we also look at market power for content providers? Also -- it's clear we don't like Telus-like discrimination.  And we don't like Madison River.  Both of those were acted on very quickly.  Largest driver for network infrastructure will require deep discrimination. (from Morgan person)

Panelists respond: 

Nachbar:  Market power is not at the root of a lot of things we regulate.  We could have competing police forces -- but we don't.  We've traditionally been more concerned about concentration in content.  Have to worry about nature of the product here.

Lehr:  Comcast owns a lot of content -- making a separation is hard.  Market power is one reason to justify, but not necessary for regulation.

Peva:  There is a terminating monopoly here, and I think that's the driving issue.  Existing antitrust rules well-designed for eBay, but not well-designed for last mile network provider. I'm not sure Telus would be in trouble in the US.  Biggest problem we have is duopoly for broadband access -- which is local.

Noam:  One day Google will ask for discriminatory pricing.