Network neutrality and market failure

You are a staff aide for a United States Senator who is trying to get a good understanding of the debate over network neutrality. Your boss understands the political arguments, but wants you to prepare a brief summary of the economic arguments to be able to answer questions from constituents who may ask about this issue. Your assignment is to write about market failures. Your task is to take an economic argument and put it into language the Senator– your boss — can use to talk to constituents who are not economists. In particular, you are to discuss whether the issues involved in the debate over network neutrality are examples of market failures that require government regulation of some sort (the Obama FCC policy under FCC Chair Tom Wheeler) or if these are market issues that the market will address (the Trump FCC policy under FCC Chair Ajit Pai). Clearly state the issue from both perspectives – what is(are) the central ECONOMIC argument(s) of those advocating in favor of net neutrality and what is(are) the central ECONOMIC argument(s) of those opposed to net neutrality. Specifically identify which type of market failure (e.g., insufficient competition or insufficient information or need for a public good or a combination of failures) the net neutrality advocates are saying needs to be addressed by government action and, from the other perspective, why those are not really market failures, but rather market issues that the market will address. ● Your introductory paragraph: Introduce the issue by explaining what it means that Internet Service Providers [ISPs] can charge more for certain content and give preferential treatment to certain websites (i.e., “blocking,” “throttling,” and “paid prioritization.”). Briefly explain if these ISP actions represent a market failure or are just examples of the market working efficiently to provide Internet access at the least price to consumers and encourage innovation. If you propose that there is(are) a market failure(s), then you need to identify which specific failure(s) and explain specifically how the market has failed. If you believe that markets can work properly without government involvement, explain how the market can address the concerns of those who advocate government regulation. ● Your first body paragraph provides more specifics than your introductory paragraph. You should EITHER (1) explain how market failures have caused the problems being discussed and how government regulation would work to address the issues of consumer protection and innovation (i.e. extend your introductory remarks to demonstrate how the problems are the direct result of a market failure and how regulation addresses that failure – the position of the Obama FCC) OR (2) explain how markets should work to efficiently address the issues of consumer protection and innovation, why market failures have not caused the problems posed by advocates of regulation, and how such regulation would interfere with the market (i.e. extend your introductory remarks to demonstrate how the problems we face are not the direct result of a market failure and how government regulation would cause problems – the position of the Trump FCC). ● Your second body paragraph should create a “counterclaim,” i.e., the best possible objections to the argument that you present in the first body paragraph. This is the most challenging section of the assignment, as it requires you to think outside of your own operating logic. You are arguing the other side here. ● Your third body paragraph should rebut the counterclaim in the second paragraph and establish the superiority of your initial position. Do not repeat the arguments made in the initial supporting paragraph, but rather point out the inherent flaws of the counterclaim. This paragraph will also allow you to introduce new information as well. Consider the following: ○ “Attack” the assumptions that the counterclaim is making ○ “Attack” the omissions that the counterclaim may have ○ Your own clever “attack” ● Your conclusion should clearly articulate the reader’s takeaway from your argument. How should this shape their outlook and their position on this issue?

#Network #neutrality #market #failure

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