Net Neutrality: Hearing Before the Committee on Commerce, Science, and Transportation, U.S. Senate

There are six essential characteristics of telecommunications networks: (1) a broadband network requires substantial sunk investment; (2) a broadband network exhibits economies of scale; (3) a broadband network exhibits economies of scope; (4) differential pricing can increase economic welfare because it enables a firm to lower the price to consumers who would otherwise be priced out of the market; (5) telecommunications services have joint demand; and (6) telecommunications networks are susceptible to congestion. These characteristics must be followed closely when drafting network neutrality legislation.

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