A Washington think tank is proposing a new solution to the Net neutrality debate, one it hopes will diffuse much of the over-charged arguments being waged today.

The Information Technology and Innovation Foundation, which bills itself as independent and nonpartisan, is proposing a set of rules and incentives that it believes will assure unfettered Internet access while also giving service providers a chance to recoup their investment in broadband technology.

The polarized nature of the current Net neutrality debate has led both sides to opposite and untenable positions, from which each is denying key issues in the other’s argument, said Rob Atkinson, ITIF President and co-author with University of Colorado Associate Professor of Law and Telecommunications Phil Weiser of a new report, “A Third Way on Network Neutrality,” which sets up a middle ground.

“The basic way we propose doing that is to build in a set of carrots and sticks that lead the network providers to providing an open, nondiscriminatory pipe, as well as a managed and QoS pipe,” he said. “To use a popular analogy, yes, they can build a toll road and charge cars for riding on it--but they have to have a pretty good and growing free road.”

Atkinson and Weiser propose a three-part plan:

• First, the FCC sets up a basic definition of broadband, which the ITIF suggest should be a 2 Mb/s best-effort Internet service that would be measured as an average. Anyone not meeting that standard could not label the service as “broadband.”
• Second, there would be tax incentives for companies providing that 2 Mb/s open pipe to include first-year expensing of telecom network equipment used to provide the broadband services--versus 15-year depreciation--and continued forbearance from Internet taxes.
• Third, the FCC would review, on a case-by-case basis, any network provider arrangements which appear to be anti-competitive, giving service providers the opportunity to defend such arrangements if they provide consumers with something they wouldn’t get otherwise.

The ITIF has just begun discussing its solution with Congressional staff members but will be stepping up the pace of that discussion, Atkinson said.

The ITIF plan would face challenges on Capitol Hill, including the need for multiple committees to address the tax and revenue issues it raises. But at the very least, the intent is to change the current tide, Weiser said.

“The ultimate goal is to reframe the debate,” he said. “By failing to acknowledge reasonable concerns on both sides, you are unable to craft a reasonable solution.”

From the ITIF perspective, Net neutrality proponents must acknowledge that telco-cable investments in networks are expensive, and that there are other advantages to network management that “shouldn’t be written off with a hard and fast rule,” Atkinson said.

At the same time, telephone and cable operators need to acknowledge that, in a duopoly, there is a real risk of marketplace abuse.