One of the things that I have not seen discussed much in the debate over network neutrality is how the literature has argued for priority pricing of various kinds for the past twenty years or so. The classic paper in the field that reviews the literature and creates a strong theoretical foundation is MacKie-Mason and Varian's 1994 paper on congestion pricing that was published in IEEE Journal on Selected Areas of Communications (JSAC). What Verizon and SBC are planning to do seems to be precisely what these papers advocated as being a welfare gain. It would be interesting to consider both sides of the network neutrality discussion in light of this literature.
Network Neutrality, economics, pricing