Network neutrality: Avoiding the extremes

This paper addresses QoS provision in the presence of the regulatory threat of network neutrality. We formulate a technological implementation that enables QoS provision while requiring minimum alteration of the current network. Our proposal permits to avoid the political economic shock that would accompany any major network neutrality regulation. Specifically, we propose an x-network, in which an ISP is explicitly assured in its property rights to a pre-specified fraction of its capacity; the leftover fraction of capacity should continue to function as it does in the existing network, where the risks of regulations remain substantial. This proposal is based on the fact that current technology permits a reliable estimate of ISPs´ installed (and activated) capacity. The x-network creates better delineated ISP property rights, which improve their incentives to (i) experiment with providing enhanced quality of service, (ii) introduce novel products which require packet differentiation, (iii) invest in capacity expansion. The x-network permits to explore the advantages of a non neutral network, while limiting its disadvantages to a small fraction of the existing network capacity.