Zero-Rating and Vertical Content Foreclosure

Thomas Jeitschko, Soo Jin Kim () and Aleksandr Yankelevich

Information Economics and Policy, 2021, vol. 55, issue C

Abstract: We study zero-rating, a practice whereby an Internet service provider (ISP) that limits data consumption exempts certain content from that limit. This practice is particularly controversial when an ISP zero-rates its own vertically integrated content, because the data limit and ensuing overage charges impose an additional cost on rival content. We find that zero-rating and vertical integration are complementary in improving social welfare, though potentially at the expense of lower profit to an unaffiliated content provider. Moreover, allowing content providers to pay for zero-rating via a sponsored data plan raises welfare by inducing the ISP to zero-rate more content.

Keywords: Data Caps; Sponsored Data; Two-Sided Market; Vertical Content Foreclosure; Zero-Rating; Net Neutrality (search for similar items in EconPapers)
JEL-codes: D43 L11 L42 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Working Paper: Zero-rating and vertical content foreclosure (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:iepoli:v:55:y:2021:i:c:s0167624520301438

DOI: 10.1016/j.infoecopol.2020.100899

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