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Internet Interconnection and Network Neutrality

Jay Choi (), Doh-Shin Jeon () and Byung-Cheol Kim ()

No 12-355, TSE Working Papers from Toulouse School of Economics (TSE)

Abstract: We analyze competition between interconnected networks when content is heterogeneous in its sensitivity to delivery quality. In a two-sided market framework, we characterize the equilibrium in a neutral network constrained to offer the same quality and assess the impact of such a constraint vis-à-vis a non-neutral network where Internet service providers (ISPs) are allowed to engage in second degree price discrimination with a menu of quality-price pairs. We find that the merit of net neutrality regulation depends crucially on content providers' business models. More generally, our analysis can be considered as a contribution to the literature on second-degree price discrimination in two-sided platform markets.

JEL-codes: D4 L1 L5 (search for similar items in EconPapers)
Date: 2012-11
New Economics Papers: this item is included in nep-com, nep-ict, nep-mic and nep-net
References: View references in EconPapers View complete reference list from CitEc
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