Net Neutrality, Business Models, and Internet Interconnection

Title: Net Neutrality, Business Models, and Internet Interconnection
Format: Journal Article
Publication Date: August 2015

We analyze the effect of net neutrality regulation in a two-sided market framework when content is heterogeneous in its sensitivity to delivery quality. We characterize the equilibrium in a neutral network constrained to offer the same quality vis-à-vis a non neutral network where Internet service providers 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 a contribution to the literature on second-degree price discrimination in two-sided platform markets.

External Contributors: Jay Pil Choi, Doh-Shin Jeon

Choi, Jay Pil, Doh-Shin Jeon, and Byung-Cheol Kim.  "Net Neutrality, Business Models, and Internet Interconnection." American Economic Journal: Microeconomics, 7.3 (2015): 104-141.

  • Applied Microeconomics
  • Industrial Organization
Related Links:
Related File: NN-AEJ Micro-Revision2-Final-Jeon.pdf
Related Departments:
  • School of Economics