re Report: NN Makes Economic Sense read both parts

[Dave Farber <dave () farber net>]

Begin forwarded message:

> From: George Ou <george_ou () lanarchitect net>
> Date: January 14, 2010 5:57:17 PM EST
> To: dave () farber net
> Subject: RE: [IP] IPI Report: NN Makes Economic Sense  read both parts

> That study is completely flawed.
>
>
> http://www.digitalsociety.org/2010/01/net-neutrality-economic-study-based-on
> -flawed-analysis/
> A new paper from the Institute for Policy Integrity of the New York
> University School of Law claims that without Net Neutrality, ISPs  
> can double
> charge and extort content providers. But their use of flawed models  
> caused
> them to reverse the costs and reverse the conclusion.
>
>
>
> George Ou
>
> -----Original Message-----
> From: David Farber [mailto:dave () farber net]
> Sent: Thursday, January 14, 2010 1:08 PM
> To: ip
> Subject: [IP] IPI Report: NN Makes Economic Sense read both parts
>
>
>
>
> From: Richard Stallman <rms () gnu org>
> Date: January 14, 2010 9:47:34 AM EST
> To: "Jeffrey A. Williams" <jwkckid1 () ix netcom com>
> Cc: seth.johnson () RealMeasures dyndns org, ecommerce () lists essential org 
> ,
> upd-discuss () lists essential org, A2K () lists essential org
> Subject: Re: [A2k] Re: [Upd-discuss] IPI Report: NN Makes Economic  
> Sense
> Reply-To: rms () gnu org
>
>    Very true.  However there has never been, nor will there ever
>  be absolute economic efficiency or fairness.  As such a ballance
>  must be sought that everyone can live with, a very difficult
>  task to achieve and maintain.
>
> These days, we have a lot of economic efficiency in production and
> very little fairness.  As a result, lots of production goes into
> activities that are harmful in the long term, and most of the world's
> people get no benefit from all the production.
>
> Clearly we need increased concern with fairness.
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> Upd-discuss () lists essential org
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>
>
> From: "Faulhaber, Gerald" <faulhabe () wharton upenn edu>
> Date: January 14, 2010 11:28:38 AM EST
> To: David Farber <dave () farber net>
> Subject: RE: [A2k] Re: [Upd-discuss] IPI Report: NN Makes Economic  
> Sense
>
> Interesting points, most of which are wrong
>
>        1 NN doesn't make economic sense in a world of price  
> discrimination,
> as we point out in our paper.  There is no reason for ISPs to  
> discourage
> entry by application/content providers, and a profit-maximizing
> price-discriminating ISP would certainly encourage small  
> entrepreneurs with
> a low or zero price, since it results in more content which is more
> attractive to subscription customers.
>
>        2 Much of the world's production actually does go to the poor  
> (or
> "emerging middle class").  The economic revolution in India and  
> China (and
> East Asia generally) is all about this.  Has yet to happen in Africa  
> and the
> Middle East.
>
>        3 Efficiency (in production and allocation) is all about  
> incentives;
> if we get the incentives (and the markets) right, the private sector
> unleashes incredible energy.  I think the problems with Africa and the
> Middle East has much more to do with (bad) incentives than with  
> fairness.
>
>        4 Fairness is much studied by economists; lots of books/ 
> articles in
> the 1980s on fairness and efficiency tradeoffs.  Ed Zajac and Hal  
> Varian,
> among many others, have written on the topic.  Amartya Sen is the  
> leading
> social justice theorist, and has just come out with a new book; Sen is
> always worth reading.  Generally, an excessive focus on fairness  
> tends to
> blunt incentives, so nations don't grow as fast (India pre-1998).  A  
> smaller
> pie gets divided more equally, but it's a smaller pie.  Incentives  
> are what
> makes the pie grow.
>
> There are ways to get the best of fairness and efficiency, but  
> generally the
> policies we pursue are the wrong ones (e.g., trade policy).
>
> Professor Emeritus Gerald Faulhaber
> Business and Public Policy Dept.
> Wharton School, University of Pennsylvania
> Philadelphia, PA 19104
> Professor Emeritus of Law
> University of Pennsylvania
>
>
>
>
>
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