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Research Institute of Industrial Economics (IFN) Working Paper Series

No 890:
Network Neutrality and Network Management Regulation: Quality of Service, Price Discrimination, and Exclusive Contracts

Nicholas Economides and Joacim Tåg ()

Abstract: We compare four approaches to network neutrality and network management regulation in a two-sided market model: (i) no variations in Quality of Service and no price discrimination; (ii) variations in Quality of Service but no price discrimination; (iii) variations in Quality of Service and price discrimination but no exclusive contracts; and (iv) no regulation: the network operator can sell exclusive rights to content providers. We compare the equilibrium outcomes explicitly accounting for dynamic incentives to invest in improving the Quality of Service offered to each content provider. We provide a ranking Quality of Service and network operator profits across regimes.

Keywords: Network neutrality; Internet price discrimination; Exclusivity; Quality of Service; Network management; Congestion; AT&T; Verizon; Google; (follow links to similar papers)

JEL-Codes: C63; D40; D42; D43; L10; L12; L13; (follow links to similar papers)

28 pages, December 5, 2011

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This paper is published as:
Economides, Nicholas and Joacim Tåg, (2012), 'Network Neutrality and Network Management Regulation: Quality of Service, Price Discrimination, and Exclusive Contracts' in Brown, Ian (ed.) Research Handbook on Governance of the Internet, chapter 6, Edward Elgar.



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