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Net Neutrality and the Incentives (Not) to Exclude Competitors

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Abstract

This paper analyses the incentives of a vertical integrated Internet service provider (ISP) to block competitors from content markets. Using a simple model we find that the ISP does not block competing content providers as long as the contents are differentiated sufficiently. Exclusion only takes place when the competitor offers perfect homogeneous content and the ISP has a local monopoly over its Internet access customers or if network effects are strong. In this case, however, the abuse of market power can at least in Europe be prohibited by competition authorities. That is, according to our model there is no need for a regulation of net neutrality.

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  • Dewenter, Ralf & Rösch, Jürgen, 2014. "Net Neutrality and the Incentives (Not) to Exclude Competitors," Working Paper 149/2014, Helmut Schmidt University, Hamburg.
  • Handle: RePEc:ris:vhsuwp:2014_149
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    Cited by:

    1. Juliane Fudickar, 2015. "Net Neutrality, Vertical Integration, and Competition Between Content Providers," Working Papers 2015014, Berlin Doctoral Program in Economics and Management Science (BDPEMS).
    2. Dewenter Ralf & Lüth Hendrik, 2015. "Eine alternative Definition von Suchneutralität / An alternative definition of search neutrality," ORDO. Jahrbuch für die Ordnung von Wirtschaft und Gesellschaft, De Gruyter, vol. 66(1), pages 221-242, January.
    3. repec:eee:indorg:v:52:y:2017:i:c:p:358-392 is not listed on IDEAS
    4. Broos, Sébastien & Gautier, Axel, 2014. "Competing one-way essential complements: the forgotten side of net neutrality," CORE Discussion Papers 2014064, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    5. Neute, Nadine & Budzinski, Oliver, 2016. "Ökonomische Anmerkungen zur aktuellen Netzneutralitätspolitik in den USA," Ilmenau Economics Discussion Papers 100, Ilmenau University of Technology, Institute of Economics.
    6. Jan KRÄMER & Michael WOHLFARTH, 2015. "Regulating Over-the-Top Service Providers in Two-Sided Content Markets: Insights from the Economic Literature," Communications & Strategies, IDATE, Com&Strat dept., vol. 1(99), pages 71-90, 3rd quart.

    More about this item

    Keywords

    net neutrality; competition; Internet service providers;

    JEL classification:

    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • K20 - Law and Economics - - Regulation and Business Law - - - General
    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software

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