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Net neutrality: a fast lane to understanding the trade-offs

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  • Greenstein, Shane
  • Peitz, Martin
  • Valletti, Tommaso M.

Abstract

The “net neutrality” principle has triggered a heated debate and advocates have proposed policy interventions. In this paper, we provide perspective by framing issues in terms of the positive economic factors at work. We stress the incentives of market participants, and highlight the economic conflicts behind the arguments put forward by the different parties. We also identify several key open questions.

Suggested Citation

  • Greenstein, Shane & Peitz, Martin & Valletti, Tommaso M., 2016. "Net neutrality: a fast lane to understanding the trade-offs," Working Papers 16-01, University of Mannheim, Department of Economics.
  • Handle: RePEc:mnh:wpaper:40123
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    File URL: https://ub-madoc.bib.uni-mannheim.de/40123/1/Greenstein%2C%20Peitz%2C%20Valletti%2016-01.pdf
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    References listed on IDEAS

    as
    1. Reggiani, Carlo & Valletti, Tommaso, 2016. "Net neutrality and innovation at the core and at the edge," International Journal of Industrial Organization, Elsevier, vol. 45(C), pages 16-27.
    2. Marc Bourreau & Frago Kourandi & Tommaso Valletti, 2015. "Net Neutrality with Competing Internet Platforms," Journal of Industrial Economics, Wiley Blackwell, vol. 63(1), pages 30-73, March.
    3. Christos Genakos & Tommaso Valletti, 2011. "Testing The “Waterbed” Effect In Mobile Telephony," Journal of the European Economic Association, European Economic Association, vol. 9(6), pages 1114-1142, December.
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    5. Nicholas Economides & Benjamin E. Hermalin, 2012. "The economics of network neutrality," RAND Journal of Economics, RAND Corporation, vol. 43(4), pages 602-629, December.
    6. Peitz, Martin & Schuett, Florian, 2016. "Net neutrality and inflation of traffic," International Journal of Industrial Organization, Elsevier, vol. 46(C), pages 16-62.
    7. Economides, Nicholas & Tåg, Joacim, 2012. "Network neutrality on the Internet: A two-sided market analysis," Information Economics and Policy, Elsevier, vol. 24(2), pages 91-104.
    8. repec:eee:indorg:v:58:y:2018:i:c:p:31-62 is not listed on IDEAS
    9. Krämer, Jan & Wiewiorra, Lukas, 2009. "Network neutrality and congestion sensitive content providers: Implications for content variety, broadband investment and regulation," MPRA Paper 42519, University Library of Munich, Germany, revised 15 Jan 2012.
    10. E. Glen Weyl & Michal Fabinger, 2013. "Pass-Through as an Economic Tool: Principles of Incidence under Imperfect Competition," Journal of Political Economy, University of Chicago Press, vol. 121(3), pages 528-583.
    11. Shane Greenstein, 2016. "How the Internet Became Commercial: Innovation, Privatization, and the Birth of a New Network," Economics Books, Princeton University Press, edition 1, number 10574.
    12. Jay Pil Choi & Doh-Shin Jeon & Byung-Cheol Kim, 2015. "Net Neutrality, Business Models, and Internet Interconnection," American Economic Journal: Microeconomics, American Economic Association, vol. 7(3), pages 104-141, August.
    13. Joshua Gans, 2015. "Weak versus strong net neutrality," Journal of Regulatory Economics, Springer, vol. 47(2), pages 183-200, April.
    14. Aviv Nevo & John L. Turner & Jonathan W. Williams, 2016. "Usage‐Based Pricing and Demand for Residential Broadband," Econometrica, Econometric Society, vol. 84, pages 411-443, March.
    15. Frago Kourandi & Jan Krämer & Tommaso Valletti, 2015. "Net Neutrality, Exclusivity Contracts, and Internet Fragmentation," Information Systems Research, INFORMS, vol. 26(2), pages 320-338, June.
    16. Jay Pil Choi & Byung-Cheol Kim, 2010. "Net neutrality and investment incentives," RAND Journal of Economics, RAND Corporation, vol. 41(3), pages 446-471.
    17. Christos Genakos & Tommaso Valletti, 2015. "Evaluating a Decade of Mobile Termination Rate Regulation," Economic Journal, Royal Economic Society, vol. 125(586), pages 31-48, August.
    18. Barbara van Schewick, 2010. "Internet Architecture and Innovation," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262013975, March.
    19. Jullien, Bruno & Sand-Zantman, Wilfried, 2018. "Internet regulation, two-sided pricing, and sponsored data," International Journal of Industrial Organization, Elsevier, vol. 58(C), pages 31-62.
    20. Francine Lafontaine & Margaret Slade, 2007. "Vertical Integration and Firm Boundaries: The Evidence," Journal of Economic Literature, American Economic Association, vol. 45(3), pages 629-685, September.
    21. 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.
    22. Jan Krämer & Lukas Wiewiorra, 2012. "Network Neutrality and Congestion Sensitive Content Providers: Implications for Content Variety, Broadband Investment, and Regulation," Information Systems Research, INFORMS, vol. 23(4), pages 1303-1321, December.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Schweitzer, Heike & Fetzer, Thomas & Peitz, Martin, 2016. "Digitale Plattformen: Bausteine für einen künftigen Ordnungsrahmen," ZEW Discussion Papers 16-042, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    2. repec:kap:revind:v:50:y:2017:i:4:d:10.1007_s11151-016-9554-8 is not listed on IDEAS
    3. Steffen Hoernig; Francisco Monteiro, 2018. "Zero-rating, network effects, and capacity investments," FEUNL Working Paper Series wp627, Universidade Nova de Lisboa, Faculdade de Economia.
    4. Reggiani, Carlo & Valletti, Tommaso, 2016. "Net neutrality and innovation at the core and at the edge," International Journal of Industrial Organization, Elsevier, vol. 45(C), pages 16-27.
    5. Joshua S. Gans & Michael L. Katz, 2016. "Net Neutrality, Pricing Instruments and Incentives," NBER Working Papers 22040, National Bureau of Economic Research, Inc.
    6. Joshua S. Gans & Michael L. Katz, 2016. "Weak versus strong net neutrality: correction and clarification," Journal of Regulatory Economics, Springer, vol. 50(1), pages 99-110, August.
    7. Antonelli, Cristiano, 2017. "Digital Knowledge Generation and the Appropriability Trade-Off," Department of Economics and Statistics Cognetti de Martiis LEI & BRICK - Laboratory of Economics of Innovation "Franco Momigliano", Bureau of Research in Innovation, Complexity and Knowledge, Collegio 201705, University of Turin.
    8. repec:eee:indorg:v:52:y:2017:i:c:p:358-392 is not listed on IDEAS
    9. Belleflamme, Paul & Peitz, Martin, 2016. "Platforms and network effects," Working Papers 16-14, University of Mannheim, Department of Economics.
    10. José Francisco Tudón Maldonado, 2017. "Congestion v Content Provision in Net Neutrality: The Case of Amazon's Twitch.tv," 2017 Papers ptu168, Job Market Papers.
    11. Budzinski, Oliver, 2016. "Aktuelle Herausforderungen der Wettbewerbspolitik durch Marktplätze im Internet," Ilmenau Economics Discussion Papers 103, Ilmenau University of Technology, Institute of Economics.
    12. José Tudón, 2017. "Net effects of Net Neutrality: The case of Amazon’s Twitch.tv," Working Papers 17-14, NET Institute.

    More about this item

    Keywords

    Network neutrality ; internet ; regulation;

    JEL classification:

    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software

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