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Network neutrality and congestion sensitive content providers: Implications for content variety, broadband investment and regulation

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  • Krämer, Jan
  • Wiewiorra, Lukas

Abstract

We study departures from network neutrality through implementing a Quality of Service tiering regime in which an ISP charges for prioritization on a non-discriminatory basis. We find that Quality of Service tiering may be more efficient in the short run, because it better allocates the existing network capacity, and in the long run, because it provides higher investment incentives due to the increased demand for priority services by the entry of new congestion sensitive content providers. Which network regime is the most efficient depends on the distribution of congestion sensitivity among content providers, but a guideline is that the regime that provides higher incentives for infrastructure investments is more efficient in the long run.

Suggested Citation

  • 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.
  • Handle: RePEc:pra:mprapa:42519
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    More about this item

    Keywords

    Telecommunications; Internet; Net Neutrality; Network Congestion; Two-Sided Market; Quality of Service; Innovation; Investment; Regulation; Internet Freedom Preservation Act;
    All these keywords.

    JEL classification:

    • L5 - Industrial Organization - - Regulation and Industrial Policy
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications
    • D4 - Microeconomics - - Market Structure, Pricing, and Design

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