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Net neutrality and market power: The case of South Africa

Genna Robb and Ryan Hawthorne

Telecommunications Policy, 2019, vol. 43, issue 9

Abstract: Net neutrality rules have been implemented in many developed countries, often in response to concerns over network operator market power and potential blocking or throttling of content. However, developing countries typically have significantly lower levels of internet penetration and usage. Market power in respect of internet access looks quite different given that mobile is the predominant means of connection and there are often three or more mobile operators. In South Africa, there is a quasi-monopoly in the paid satellite broadcasting market and broadband providers zero-rating content from third parties (such as Netflix) may bring about more competition. We test the main theories of harm arising in the net neutrality debate, including network operator market power and exclusion among content providers using data on the number of announced prefixes and peers and IP addresses and considering examples of bundling and zero-rating conduct by operators. We find that net neutrality rules are less likely to be required in South Africa and other developing countries and that strict enforcement of such rules could in fact hinder competition in markets for content, telecommunications networks and other related markets.

Keywords: Net neutrality; South Africa; Market power; Competition (search for similar items in EconPapers)
Date: 2019
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DOI: 10.1016/j.telpol.2019.03.003

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