“I don’t think that critics are seriously thinking through the economics of Internet service before they speak,” says Eli Dourado of people like me who are worried about the anticompetitive implications of Comcast’s bandwidth cap. He patiently explains that economic theory tells us that discriminatory pricing by a monopolistic content provider, in which inelastic customers pay more than elastic ones, is provably more efficient than a one-size-fits-all pricing regime.
I have no doubt Eli has an economic model that can back up that claim. But I also think it’s a good example of a kind of persistent myopia that afflicts the economic profession. Economists...