Net Neutrality in the Content Provision and Internet Service Provision Markets

Turgut Erkul () and Sencer Ecer
Additional contact information
Turgut Erkul: Istanbul Technical University, Graduate School, Istanbul, Turkiye

Istanbul Journal of Economics-Istanbul Iktisat Dergisi, 2022, vol. 72, issue 72-2, 689-724

Abstract: Relaxing net neutrality in the form of introducing termination fees and its welfare effects are considered in a model of imperfect complements. The equilibrium of the game between the internet service provider (ISP) and the content provider (CP) yields welfare-maximizing termination fees that depend on the relative size of the ISP’s and the CP’s own-price effects and the cross-price effects. Only when the ISP’s own price effect is relatively high compared to that of the CP’s, along with high cross price effects, such a fee should be allowed. On the other hand, when the CP’s own price effect is relatively high compared to that of the ISP’s, along with high cross price effects, mergers are expected and are likely not harmful to social welfare. Telecommunication regulators may find the results useful in their net neutrality decisions.

Keywords: Net neutrality; Termination fee; Waterbed effect JEL Classification: L13; L51; L86 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://cdn.istanbul.edu.tr/file/JTA6CLJ8T5/C8807D345A3348E0860A68E970D4702C (application/pdf)
https://iupress.istanbul.edu.tr/en/journal/ije/art ... ce-provision-markets (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ist:journl:v:72:y:2022:i:2:p:689-724

DOI: 10.26650/ISTJECON2022-1113428

Access Statistics for this article

Istanbul Journal of Economics-Istanbul Iktisat Dergisi is currently edited by Gökhan Karabulut

More articles in Istanbul Journal of Economics-Istanbul Iktisat Dergisi from Istanbul University, Faculty of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Istanbul University Press Operational Team (Ertuğrul YAŞAR) ().