Are “Dumb Pipe” Mandates Smart Public Policy? Vertical Integration, Net Neutrality, and the Network Layers Model

An “open-vs.-closed” distinction is a simplified description of the net neutrality debate, where “open” networks, exemplified by the “dumb pipe” analogy, reflect regulations mandating network neutrality. These regulatory proposals operate on the mistaken belief that vertical integration between the layers of the Internet discriminates against those operating in other layers. Instead, vertical integration ensures a more robust and diverse broadband marketplace, whereas open networks, by abandoning vertical integration, discourage competition and innovation of new networks and services.