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Net neutrality and innovation at the core and at the edge

  • Carlo Reggiani
  • Tommaso Valletti

How would abandoning Internet net neutrality affect content providers that have different sizes? We model an Internet broadband provider that can offer a different quality of service (priority) to heterogeneous content providers. Internet users can potentially access all content, although they browse and click ads with different probabilities. Net neutrality regulation effectively protects innovation done at the edge by small content providers. Prioritization, instead, increases both infrastructure core investment and welfare only if it sufficiently stimulates innovation from the large content provider.

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File URL: http://hummedia.manchester.ac.uk/schools/soss/economics/discussionpapers/EDP-1202.pdf
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Paper provided by Economics, The University of Manchester in its series The School of Economics Discussion Paper Series with number 1202.

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Date of creation: 2012
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Handle: RePEc:man:sespap:1202
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