Classroom Companion: Business

Further Reading
Ford, M. (2017). The rise of the robots. Oneworld Publications.
 
Chapter 20 · Big Data Economics

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© The Author(s), under exclusive license to Springer Nature 
Switzerland AG 2021
H. Øverby, J. A. Audestad, Introduction to Digital Economics, 
Classroom Companion: Business,
https://doi.org/10.1007/978-3-030-78237-5_21
323
Net Neutrality
Contents
21.1 
 Basic Net Neutrality – 324
21.2 
 5G and Net Neutrality – 326
21.3 
 Device and Search
Neutrality – 328
21.4 
 Business Implications
of Net Neutrality – 329
21.5 
 Zero-Rating – 331
21.6 
 Conclusions – 332
 References – 333
21

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324
21
 
n Learning Objectives
After completing this chapter, you should be able to:
5
Explain why net neutrality implies that ISPs must treat all communication on the 
Internet equally and without any kind of discrimination.
5
Explain how net neutrality promotes innovation, prompts competition, and sup-
ports free exchange of information on the Internet.
5
Identify reasons why strict adherence to net neutrality is not desirable in certain 
cases, for example, to support streaming services and real-time online gaming, 
and discuss the implications this may have on resource sharing and network per-
formance.
21.1
 Basic Net Neutrality
Definition 21.1 Net Neutrality
Net neutrality is the principle that all communication on the Internet shall be treated 
equally and without any form of discrimination by the Internet service providers 
(ISPs).
With net neutrality in force, there shall be no discrimination of the transmission of 
data based on the identity of the sending or the receiving users, the content of the 
data, or the associated application. This means that data packets transmitted on 
the Internet should be subject to the best-effort paradigm and handled on a first- 
come- first-served basis. This also means that the ISPs cannot perform any kind of 
blocking of applications, data rate throttling of specific applications, or any dif-
ferentiated treatment of data packets based on the identity of the sender or the 
receiver of the data packets. With full net neutrality in force, even advanced net-
work management to support service quality is forbidden; for example, schemes 
that give different treatments to voice communication compared to other Internet 
traffic. 
7
Section 
21.2
 discusses why 4G and 5G mobile networks are an exception 
to the strict rule of net neutrality.
Net neutrality is an important part of the Open Internet Rule, in which the 
Internet shall be open and accessible for everybody without any kind of discrimi-
nation. Moreover, under the Open Internet Rule, any consumer’s access to or usage 
of the Internet should not be driven by financial motivations of the ISPs. Net neu-
trality effectively reduces the ISPs to a carrier of bits between senders and receivers. 
Any involvement of the ISP in higher layer functionalities or other services is in 
general not compatible with net neutrality (Murray, 
2016
).
The term net neutrality was coined by Professor Tim Wu in his paper Network 
Neutrality, Broadband Discrimination (2003) (Wu, 
2003
) and has been the target of 
much political debate since then. The main issue is whether or not the principle of 
net neutrality shall be enforced on the Internet.