This paper assesses whether and how Internet Service Providers (“ISPS”) can demand paid service enhancements for particular types of traffic and customers without disadvantaging competitors and harming consumers. It will use the recent paid peering agreement between Netflix and Comcast as a case study as well as other instances where parties negotiate carriage of “mission critical” bits and “must see” television. The paper concludes that the Federal Communications Commission lacks jurisdiction to regulate ISP price and quality of service discrimination.
However, the paper also concludes that network bias does not always serve anticompetitive goals, nor does it always result in an unlevel competitive playing field. The paper identifies instances where a regulatory referee remains necessary to offer timely resolution of increasingly frequent disputes about what constitutes fair network bias particularly for the carriage of bandwidth intensive video content.