Net neutrality, Network capacity and Innovation at the Edges

Choi, Jay Pil, Jeon, Doh-Shin and Kim, Byung-Cheol (2018) Net neutrality, Network capacity and Innovation at the Edges. Journal of Industrial Economics, 66 (1). pp. 172-204.

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Official URL: http://tse-fr.eu/pub/32295

Abstract

We study how net neutrality regulations affect a high-bandwidth content provider (CP)'s investment incentives to enhance its quality of services (QoS) in content delivery to end users. We find that the effects crucially depend on whether the CP's entry decision is constrained by the Internet service provider (ISP)'s network capacity. If capacity is relatively large, prioritized services reduce the QoS investment as they become substitutes, but improve trafic management. With limited capacity, by contrast, prioritized delivery services are complementary to the CP's investments and can facilitate entry of congestionsensitive content; however, this creates more congestion for other existing content. Our analysis suggests that the optimal policy may call for potentially asymmetric regulations across mobile and fixed networks.

Item Type: Article
Language: English
Date: March 2018
Refereed: Yes
Uncontrolled Keywords: Net neutrality, network capacity, entry, quality of services (QoS), externalities, investments
Subjects: B- ECONOMIE ET FINANCE
Divisions: TSE-R (Toulouse)
Site: UT1
Date Deposited: 18 May 2018 10:06
Last Modified: 19 Jul 2019 14:29
OAI ID: oai:tse-fr.eu:32295
URI: http://publications.ut-capitole.fr/id/eprint/25793

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