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Net neutrality, Network capacity and Innovation at the Edges

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

No 14-521, TSE Working Papers from Toulouse School of Economics (TSE)

Abstract: We study how net neutrality regulations affect a high-bandwidth content provider (CP)'s investment incentives to enhance its quality of services (QoS) in content delivery to end users. We find that the effects crucially depend on whether the CP's entry decision is constrained by the Internet service provider (ISP)'s network capacity. If capacity is relatively large, prioritized services reduce the QoS investment as they become substitutes, but improve trafic management. With limited capacity, by contrast, prioritized delivery services are complementary to the CP's investments and can facilitate entry of congestionsensitive content; however, this creates more congestion for other existing content. Our analysis suggests that the optimal policy may call for potentially asymmetric regulations across mobile and fixed networks.

Keywords: Net neutrality; network capacity; entry; quality of services (QoS); externalities; investments (search for similar items in EconPapers)
Date: 2014-08, Revised 2017-07
New Economics Papers: this item is included in nep-com, nep-ict, nep-net and nep-reg
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Journal Article: Net Neutrality, Network Capacity, and Innovation at the Edges (2018) Downloads
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