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Empirical evidence of network neutrality – The incentives for discrimination

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  • Lee, Daeho
  • Kim, Yong-Hwa

Abstract

For the past few years, the network neutrality debate has been a burning international issue, and many researchers have provided various solutions to solve the network neutrality debate in a short time. So far, however, both the proponents and opponents of network neutrality have not provided the empirical evidence necessary to prove their assertions. This study collected data using surveys and estimated usage rates of end users while changing the QoS level of each application. Based on the estimation results of the willingness-to-pay (WTP) and usage rates of end users, this study investigates whether Internet service providers (ISPs) have the incentives to discriminate against application services and whether those incentives change according to various conditions. As a result, ISPs have the incentive to provide a low QoS level for costly application services, and the incentives change according to conditions such as regulatory regimes, the cost of the Internet access service from the ISP, the WTP of the end users, and the degree of competition among the ISPs.

Suggested Citation

  • Lee, Daeho & Kim, Yong-Hwa, 2014. "Empirical evidence of network neutrality – The incentives for discrimination," Information Economics and Policy, Elsevier, vol. 29(C), pages 1-9.
    • Handle: RePEc:eee:iepoli:v:29:y:2014:i:c:p:1-9
    DOI: 10.1016/j.infoecopol.2014.07.001
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    References listed on IDEAS

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    1. Hsing Kenneth Cheng & Subhajyoti Bandyopadhyay & Hong Guo, 2011. "The Debate on Net Neutrality: A Policy Perspective," Information Systems Research, INFORMS, vol. 22(1), pages 60-82, March.
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    3. Daeho Lee & Junseok Hwang, 2011. "The Effect of Network Neutrality on the Incentive to Discriminate, Invest and Innovate: A Literature Review," TEMEP Discussion Papers 201184, Seoul National University; Technology Management, Economics, and Policy Program (TEMEP), revised Nov 2011.
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    8. Daeho Lee & Jungwoo Shin & Junseok Hwang, 2011. "Application-Based Quality Assessment of Internet Access Service," TEMEP Discussion Papers 201183, Seoul National University; Technology Management, Economics, and Policy Program (TEMEP), revised Nov 2011.
    9. Musacchio John & Schwartz Galina & Walrand Jean, 2009. "A Two-Sided Market Analysis of Provider Investment Incentives with an Application to the Net-Neutrality Issue," Review of Network Economics, De Gruyter, vol. 8(1), pages 1-18, March.
    10. Lee, Daeho & Hwang, Junseok, 2011. "Network neutrality and difference in efficiency among Internet application service providers: A meta-frontier analysis," Telecommunications Policy, Elsevier, vol. 35(8), pages 764-772, September.
    11. Robin S. Lee & Tim Wu, 2009. "Subsidizing Creativity through Network Design: Zero-Pricing and Net Neutrality," Journal of Economic Perspectives, American Economic Association, vol. 23(3), pages 61-76, Summer.
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    Cited by:

    1. Lee, Daeho & Shin, Jungwoo & Lee, Sangwon, 2015. "Network management in the era of convergence: Focusing on application-based quality assessment of Internet access service," Telecommunications Policy, Elsevier, vol. 39(8), pages 705-716.
    2. Briglauer, Wolfgang & Stocker, Volker & Stockhammer, Paul, 2019. "Ist Netzneutralität tatsächlich gut? Eine Neubewertung vor dem Hintergrund der Regulierung in den USA und in der EU sowie aktueller Forschungsergebnisse," Policy Notes 38, EcoAustria – Institute for Economic Research.
    3. Wolfgang Briglauer & Carlo Cambini & Klaus Gugler & Volker Stocker, 2023. "Net neutrality and high-speed broadband networks: evidence from OECD countries," European Journal of Law and Economics, Springer, vol. 55(3), pages 533-571, June.

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    More about this item

    Keywords

    Network neutrality; Discrimination; Internet application; Internet service provider;
    All these keywords.

    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • D49 - Microeconomics - - Market Structure, Pricing, and Design - - - Other
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L50 - Industrial Organization - - Regulation and Industrial Policy - - - General

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