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Internet access and investment incentives for broadband service providers

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  • Edmond Baranes
  • Jean-Christophe Poudou

Abstract

This paper studies a model of the Internet broadband market as a platform in order to show how di¤erent pricing schemes from the so-called "net neutrality " can increase economic e¢ ciency by allowing more investment of access providers and enhancing consumers surplus and social welfare. We show that departing from the "net neutrality", where ‡at rates are used, introducing termination fees can increase incentives to invest for the ISP and enhance social surplus. Keywords : Network neutrality, Flat rates, Termination fees.

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File URL: http://www.lameta.univ-montp1.fr/Documents/DR2011-09.pdf
File Function: First version, 2011
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Bibliographic Info

Paper provided by LAMETA, Universtiy of Montpellier in its series Working Papers with number 11-09.

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Length: 26 pages
Date of creation: Apr 2011
Date of revision: Apr 2011
Handle: RePEc:lam:wpaper:11-09

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  1. Nicholas Economides & Joacim Tåg, 2007. "Net Neutrality on the Internet: A Two-sided Market Analysis," Working Papers 07-45, NET Institute, revised Nov 2007.
  2. Nicholas Economides & Benjamin E. Hermalin, 2012. "The economics of network neutrality," RAND Journal of Economics, RAND Corporation, vol. 43(4), pages 602-629, December.
  3. Jan Kraemer & Lukas Wiewiorra, 2010. "Network Neutrality and Congestion Sensitive Content Providers: Implications for Service Innovation, Broadband Investment and Regulation," Working Papers 10-09, NET Institute, revised Sep 2010.
  4. Benjamin E. Hermalin & Michael L. Katz, 2004. "Sender or Receiver: Who Should Pay to Exchange an Electronic Message?," RAND Journal of Economics, The RAND Corporation, vol. 35(3), pages 423-447, Autumn.
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