Network Neutrality and Quality of Service: A two-sided market analysis
In this paper, we examine welfare implications of switching from a neutrality regime to a network management regime. While in the former a network provider or an integrated ISP should transmit data with a-bit-is-a-bit principle, in the latter it is allowed to differentiate its connection quality considering economic value of data packets transmitted from content or application providers to end-users. The differentiation indicates allowing the ISP to apply QoS arrangements for quality-sensitive contents or applications. The above issues are first examined with a model in which there is a monopolist ISP, and later it is extended through introducing duopoly competition. Our results refer some potential gains that can be captured through network management regime. Although the overall effect of deviation from neutrality regime on total surplus may not defined clearly, both in monopoly and in duopoly models we have found that end-users and quality-sensitive content or application providers benefit from network management regime, in case of enough increase in quality of connection offered by ISP(s).And, regular content or application providers suffer with decreasing connection quality because of fixed network capacity.
|Date of creation:||2010|
|Date of revision:|
|Contact details of provider:|| Web page: http://www.itseurope.org/|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Jay Pil Choi & Byung-Cheol Kim, 2008.
"Net Neutrality and Investment Incentives,"
CESifo Working Paper Series
2390, CESifo Group Munich.
- Jay Pil Choi & Byung-Cheol Kim, 2008. "Net Neutrality and Investment Incentives," Working Papers 08-03, NET Institute.
- Choi, Jay & Kim, Byung-Cheol, 2008. "Net Neutrality and Investment Incentives," Working Paper Series 4010, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.
- Jean-Charles Rochet & Jean Tirole, 2014.
"Platform Competition in Two-Sided Markets,"
Competition Policy International, vol. 10.
- Hermalin, Benjamin E & Katz, Michael L, 2006.
"The Economics of Product-Line Restrictions With an Application to the Network Neutrality Debate,"
Competition Policy Center, Working Paper Series
qt81r3b7xs, Competition Policy Center, Institute for Business and Economic Research, UC Berkeley.
- Hermalin, Benjamin E. & Katz, Michael L., 2007. "The economics of product-line restrictions with an application to the network neutrality debate," Information Economics and Policy, Elsevier, vol. 19(2), pages 215-248, June.
- Jörn Kruse, 2008. "Network Neutrality and Quality of Service," Intereconomics: Review of European Economic Policy, Springer, vol. 43(1), pages 25-30, January.
- Jean-Charles Rochet & Jean Triole, 2002.
"Platform Competition in Two Sided Markets,"
FMG Discussion Papers
dp409, Financial Markets Group.
- Jean-Charles Rochet & Jean Triole, 2002. "Platform competition in two sided markets," LSE Research Online Documents on Economics 24929, London School of Economics and Political Science, LSE Library.
- Rochet, Jean-Charles & Tirole, Jean, 2003. "Platform Competition in Two-Sided Markets," IDEI Working Papers 152, Institut d'Économie Industrielle (IDEI), Toulouse.
When requesting a correction, please mention this item's handle: RePEc:zbw:itse10:43. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ZBW - German National Library of Economics)
If references are entirely missing, you can add them using this form.