Bit-by-Bit Towards Unlimited: An Analysis of Zero Rating and Sponsored Data Practices of Internet Service Providers
Daniel Schnurr and
29th European Regional ITS Conference, Trento 2018 from International Telecommunications Society (ITS)
Zero rating and sponsored data have recently been introduced as new tari↵ options in mobile telecommunications markets. Both practices exempt data traffic of specific Internet services from an Internet user's download limit and thus allow for unlimited consumption of the respective content. Whereas network operators have advertised these options as consumer-friendly innovations, both practices have been criticized by net neutrality proponents and are currently under regulatory scrutiny in several countries. Based on a model of a monopolistic Internet access provider and two advertising-financed content providers, we investigate market outcomes under both zero rating and sponsored data and assess optimal pricing schemes, firms' profits, consumer surplus and total welfare. We then analyze welfare e↵ects if network operators are prohibited from o↵ering service-specific exemptions from users' data allowance and derive policy implications for the current regulatory debate on net neutrality.
Keywords: Internet access; data caps; zero rating; sponsored data; price discrimination; net neutrality; regulation; public policy (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com and nep-pay
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (1) Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:zbw:itse18:184965
Access Statistics for this paper
More papers in 29th European Regional ITS Conference, Trento 2018 from International Telecommunications Society (ITS)
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().