Advanced Search
MyIDEAS: Login

The Economics of Net Neutrality Revisited

Contents:

Author Info

  • Gernot Pehnelt

    ()
    (Director of GlobEcon, Research Associate at ECIPE and Research Partner at the Chair of Economic Policy, Friedrich-Schiller-University Jena)

Registered author(s):

    Abstract

    In this paper, we analyze the problem of congestion and quality loss of data transmission through the Internet from an economic perspective. We show that due to the congestion problem, quality sensitive services are likely to be crowded out by high volume but less quality sensitive applications in a strict "neutral" system. This crowding out reduces the availability of services and the development and diffusion of innovative and high value services. Not least, the congestion problem causes welfare loss. As we discuss in this paper, the differentiation of data packets according to their quality sensitivity could remedy the congestion problem. Appropriate business models that incorporate quality of service concepts could be very efficient in preventing the crowding out of high value quality sensitive services without affecting other applications and would be very convenient for Internet users at the same time. We show that any ex ante regulation in the sense of strict Net neutrality could seriously harm the development of innovative business models and discourage innovation and investment.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://zs.thulb.uni-jena.de/receive/jportal_jparticle_00138336
    Download Restriction: no

    Bibliographic Info

    Paper provided by Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics in its series Jena Economic Research Papers with number 2008-080.

    as in new window
    Length:
    Date of creation: 27 Oct 2008
    Date of revision:
    Handle: RePEc:jrp:jrpwrp:2008-080

    Contact details of provider:
    Postal: Carl-Zeiss-Strasse 3, 07743 JENA
    Phone: +049 3641/ 9 43000
    Fax: +049 3641/ 9 43000
    Web page: http://www.jenecon.de
    More information through EDIRC

    Related research

    Keywords: Net neutrality; Internet; bandwidth; quality sensitivity; crowding-out;

    Find related papers by JEL classification:

    This paper has been announced in the following NEP Reports:

    References

    No references listed on IDEAS
    You can help add them by filling out this form.

    Citations

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:jrp:jrpwrp:2008-080. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Markus Pasche).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.