Quite an interesting blog entry about and net neutrality. Paul Sweeting summarizes various views espoused by academic economists during a video policy symposium. Some highlights:
“Copyright is a very big issue in the legal world today, but in the business world, when you talk to consumers about protecting copyrights, it’s a dead issue,” he said. “It’s gone. If you have a business model based on copyright, forget it.”
According to Faulhaber, the “world of open piracy,” created by digital technology will always thwart content owners seeking to leverage the monopoly granted to them by copyright law.
Though today the iTunes/Amazon model seems to be the more popular one, commentators said that a better business model would be one where content providers would “hook up with the conduit guys.” Monetizing the content would presumably be easier because providers can control its distribution.
Finally, because the bandwidth required for high quality video is not yet cheap, providers are seeking to economize that scarce resource through traffic shaping or network management. Wharton professor Gerry Faulhaber has said that regulating or prohibiting traffic shaping would make things worse: “Regulating traffic shaping will reduce available capacity. If demand exceeds supply, total throughput on a network declines, sometimes to zero.”