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Network Neutrality and Network Management Regulation: Quality of Service, Price Discrimination, and Exclusive Contracts

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Abstract

We compare four approaches to network neutrality and network management regulation in a two-sided market model: (i) no variations in Quality of Service and no price discrimination; (ii) variations in Quality of Service but no price discrimination; (iii) variations in Quality of Service and price discrimination but no exclusive contracts; and (iv) no regulation: the network operator can sell exclusive rights to content providers. We compare the equilibrium outcomes explicitly accounting for dynamic incentives to invest in improving the Quality of Service offered to each content provider. We provide a ranking Quality of Service and network operator profits across regimes.

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File URL: http://www.stern.nyu.edu/networks/Economides_Tag_Net_Neutrality_and_Net_Management.pdf
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Bibliographic Info

Paper provided by NET Institute in its series Working Papers with number 11-02.

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Length: 28 pages
Date of creation: Apr 2011
Date of revision:
Publication status: Forthcoming, Research Handbook on Governance of the Internet, Ian Brown (Ed.), Edward Elgar: London.
Handle: RePEc:net:wpaper:1102

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Web page: http://www.NETinst.org/

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Keywords: Network neutrality; Internet price discrimination; exclusivity; quality of Service; network management; congestion; AT&T; Verizon; Google;

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  1. Jay Pil Choi & Byung-Cheol Kim, 2008. "Net Neutrality and Investment Incentives," Working Papers 08-03, NET Institute.
  2. Hermalin, Benjamin E. & Katz, Michael, 2007. "The Economics of Product-Line Restrictions With an Application to the Network Neutrality Debate," Working paper 541, Regulation2point0.
  3. Keith M. Chen & Barry Nalebuff, 2006. "One-Way Essential Complements," Levine's Bibliography 321307000000000669, UCLA Department of Economics.
  4. Christiaan Hogendorn, 2007. "Broadband Internet: net neutrality versus open access," International Economics and Economic Policy, Springer, vol. 4(2), pages 185-208, August.
  5. Chen, M. Keith & Nalebuff, Barry, 2006. "One-Way Essential Complements," Working Papers 22, Yale University, Department of Economics.
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