No. 14-08 MARCH 2014 WORKING PAPER INNOVATIONS IN MOBILE BROADBAND PRICING by Daniel A. Lyons The opinions expressed in this Working Paper are the author’s and do not represent official positions of the Mercatus Center or George Mason University. About the Author Daniel A. Lyons Assistant Professor Boston College Law School
[email protected] Acknowledgments Special thanks to Joe Kennedy, Crystal Lyons, and two anonymous commenters for their helpful comments and suggestions, and to Jonathan Hu for invaluable research assistance. Abstract Although intended to promote competition and innovation among Internet content providers, “net neutrality” rules reduce innovation by broadband service providers. Within limits, broadband providers may offer different plans that vary the quantity and quality of their service. But they usually cannot vary the service itself: broadband providers are generally required to offer customers access to all lawful Internet traffic, or none at all. This all-or-nothing broadband homogenization places America increasingly at odds with international markets, particularly with regard to mobile broadband. This paper examines the diverse array of wireless broadband products available worldwide, and uses these international innovations to illuminate the difficulties posed by net neutrality principles in the United States. Broadband access is merely one part of a much broader Internet ecosystem. Regulators’ focus on one narrow set of relationships in that ecosystem retards innovation and limits the ability of Americans to share in the global revolution currently taking place for mobile services. JEL codes: K00, K2, K23 Keywords: net neutrality, broadband, wireless, mobile, Internet, FCC, Open Internet, international, pricing, antitrust, tying, innovation Innovations in Mobile Broadband Pricing Daniel A.