Net Neutrality, Business Models, and Internet Interconnection

Choi, Jay Pil, Jeon, Doh-Shin and Kim, Byung-Cheol (2015) Net Neutrality, Business Models, and Internet Interconnection. American Economic Journal: Microeconomics, 7 (3). pp. 103-141.

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Official URL: http://tse-fr.eu/pub/28292

Abstract

We analyze competition between interconnected networks when content is heterogeneous in its sensitivity to delivery quality. In a two-sided market framework, we characterize the equilibrium in a neutral network constrained to offer the same quality and assess the impact of such a constraint vis-`a-vis a non-neutral network where Internet service providers (ISPs) are allowed to engage in second degree price discrimination with a menu of quality-price pairs. We find that the merit of net neutrality regulation depends crucially on content providers' business models. More generally, our analysis can be considered as a contribution to the literature on second-degree price discrimination in two-sided platform markets.

Item Type: Article
Language: English
Date: 2015
Refereed: Yes
Place of Publication: Nashville, TN
JEL codes: D4 - Market Structure and Pricing
L1 - Market Structure, Firm Strategy, and Market Performance
L5 - Regulation and Industrial Policy
Subjects: B- ECONOMIE ET FINANCE
Divisions: TSE-R (Toulouse)
Site: UT1
Date Deposited: 16 Mar 2015 14:48
Last Modified: 20 Mar 2019 15:12
OAI ID: oai:tse-fr.eu:28292
URI: http://publications.ut-capitole.fr/id/eprint/16529

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