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Net neutrality and regulation on the internet access

Author

Listed:
  • Sue H. Mialon

    (Emory University)

  • Samiran Banerjee

    (Emory University)

Abstract

We analyze the welfare implication of net neutrality that regulates the price of the last-mile access to consumers provided by local Internet service providers (ISPs). The model highlights a vertical relationship between local ISPs and large content providers, called Content Network Platforms (CNPs), who serve as intermediaries between consumers and content providers (CPs). The welfare implication of regulation on Internet-access termination fee depends on the relationship between ISPs and CNPs and its impact on consumer demand for the Internet. Regulation improves welfare if no platform has dominance. If ISPs have a dominant factor in determining the consumer demand, net neutrality improves welfare for a sufficiently price-responsive demand. However, if CNPs hold a dominant factor to determine the consumer demand, regulation strengthens CNPs’ market power and a significant increase in network externality is needed to improve welfare.

Suggested Citation

  • Sue H. Mialon & Samiran Banerjee, 2025. "Net neutrality and regulation on the internet access," Journal of Regulatory Economics, Springer, vol. 67(1), pages 1-28, June.
    • Handle: RePEc:kap:regeco:v:67:y:2025:i:1:d:10.1007_s11149-024-09484-3
    DOI: 10.1007/s11149-024-09484-3
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    More about this item

    Keywords

    Internet; Net neutrality; Open access regulation; Two-sided markets;
    All these keywords.

    JEL classification:

    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • H00 - Public Economics - - General - - - General

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