Strategic Use of Zero-rating of Mobile Data

Bronwyn Howell and Roslyn Layton

A chapter in Strategy and Behaviors in the Digital Economy from IntechOpen

Abstract: The digital economy, characterised by goods exhibiting high instantiation and low reproduction costs frequently created and distributed over multisided platforms, poses challenges for the pricing of products and services. As convergence occurs between applications and transport, flexible ways of pricing internet access and content are being developed. One frequently used pricing strategy is 'zero-rating'--where traffic for specific applications is not counted against the 'cap' in an internet user's monthly access plan. This pricing strategy has drawn much criticism from net neutrality advocates, but it is far from clear that the policy is harmful. Using an economic analysis based upon relaxing assumptions in the simple model of perfect competition, so that it more closely reflects the complex internet ecosystem, we assess the extent to which it is plausible for zero-rating to be used to harm competition, consumer welfare and incentives for application innovation. We develop five questions to assist inquiry into the potential harm or benefits arising, which can be applied by competition authorities, regulators and the firms concerned to assist in sorting the cases less likely to be harmful from those that warrant further investigation.

Keywords: zero-rating; economic analysis; regulation; competition; strategic interaction (search for similar items in EconPapers)
JEL-codes: M21 (search for similar items in EconPapers)
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.intechopen.com/chapters/68310 (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:ito:pchaps:181248

DOI: 10.5772/intechopen.84130

Access Statistics for this chapter

More chapters in Chapters from IntechOpen
Bibliographic data for series maintained by Slobodan Momcilovic ().