Net Neutrality, Foreclosure and the Fast Lane: An Empirical Study of the UK

Nurski, Laura

doi:10.2139/ssrn.2164382

“…The authors emphasize that, according to their results, both zero rating and paid prioritization are distortionary -challenging the view that the latter should be more scrutinized than the former. This result is in line with the empirical findings in Nurski (2012) using data from the UK. The author finds that departures from net neutrality might steer consumers' choice towards the CP included in the zero rating plan.…”

Section: Related Worksupporting

confidence: 92%

“…4 See Schnurr and Wiewiorra (2018) and Krämer and Peitz (2018). 5 See Nurski (2012). 6 See Krämer and Peitz (2018).…”

Section: Introductionmentioning

confidence: 99%

“… See Easley et al (2018) andGreenstein et al (2016) for a survey. 11 See, for instance,Hermalin and Katz (2007),Choi and Kim (2010),Economides and Hermalin (2012),Economides and Tåg (2012),Krämer and Wiewiorra (2012),Bourreau et al (2015) orPeitz and Schuett (2016) for the implications for incentives to invest in broadband capacity andKrämer and Wiewiorra (2012),Reggiani and Valletti (2016) orChoi et al (2018) for the interplay with content innovation.12 SeeKrämer and Peitz (2018) andGoldfarb and Tucker (2019).…”

mentioning

confidence: 99%

See 1 more Smart Citation

Zero-rating, content quality, and network capacity

Lorenzon

¹

2022

Information Economics and Policy

2

0

View full text Add to dashboard Cite

We consider a departure from net neutrality by an Internet service provider (ISP) that financially discriminates among content providers through bilateral zero rating contracts. Zero rating is an instrument to distort competition between content providers and the way in which consumers value content. We analyze its implications for the incentives to provide quality in the market for content and to invest in broadband infrastructure. Zero rating makes content more expensive for consumers to access and implies a downward distortion of quality by increasing downward vertical differentiation. Content providers move from a minimal differentiation equilibrium to a downward vertical differentiation outcome. Next, we find that while zero rating happens to reduce congestion, a profitmaximizing ISP always underinvests in the broadband infrastructure in the discriminatory network. We highlight that this underprovision comes from a standard rent-extraction argument and a new costalleviation channel, which relates to the complementarity between network capacity and content quality. Finally, the ISP always implements zero rating, which is welfare reducing and detrimental to consumers.

show abstract

“…While the academic literature is replete with theoretical models incorporating such tradeoffs, empirical evidence of these effects are scarce. The only paper I know to address the issue with observational data is Nurski (2014), who explores the issue in using detailed UK data. She estimates demand for broadband video access and online video consumption, finding that both are sensitive to connection speeds.…”

Section: Net Neutrality and Foreclosure In Online Video Marketsmentioning

confidence: 99%

The Economics of Television and Online Video Markets

Crawford

¹

2015

View full text Add to dashboard Cite

Television is the dominant entertainment medium for hundreds of millions. This chapter surveys the economic forces that determine the production and consumption of this content. It presents recent trends in television and online video markets, both in the US and internationally, and describes the state of theoretical and empirical research on these industries. A number of distinct themes emerge, including the growing importance of the pay-television sector, the role played by content providers (channels), distributors, and negotiations between them in determining market outcomes, and concerns about the effects of market power throughout this vertical structure. It also covers important but unsettled topics including the purpose for and effects of both the old (Public Service Broadcasters) and the new (online video markets). Open theoretical and empirical research questions are highlighted throughout. JEL: L82, L86, L32, M37, C72, D40, L40, L50

show abstract

“… See Easley et al (2018) andGreenstein et al (2016) for a survey.11 See, for instance,Hermalin and Katz (2007),Choi and Kim (2010),Economides and Hermalin (2012),Economides and Tåg (2012),Krämer and Wiewiorra (2012),Bourreau et al (2015) orPeitz and Schuett (2016) for the implications for incentives to invest in broadband capacity andKrämer and Wiewiorra (2012),Reggiani and Valletti (2016) orChoi et al (2018) for the interplay with content innovation.12 SeeKrämer and Peitz (2018) andGoldfarb and Tucker (2019).…”

mentioning

confidence: 99%

Zero Rating, Content Quality and Network Capacity

Lorenzon

¹

2021

SSRN Journal

0

View full text Add to dashboard Cite

We consider a departure from net neutrality by an Internet service provider (ISP) that financially discriminates among content providers through bilateral zero rating contracts. Zero rating is an instrument to distort competition between content providers and the way in which consumers value content. We analyze its implications for the incentives to provide quality in the market for content and to invest in broadband infrastructure. Zero rating makes content more expensive for consumers to access and implies a downward distortion of quality by increasing downward vertical differentiation. Content providers move from a minimal differentiation equilibrium to a downward vertical differentiation outcome. Next, we find that while zero rating happens to reduce congestion, a profitmaximizing ISP always underinvests in the broadband infrastructure in the discriminatory network. We highlight that this underprovision comes from a standard rent-extraction argument and a new costalleviation channel, which relates to the complementarity between network capacity and content quality. Finally, the ISP always implements zero rating, which is welfare reducing and detrimental to consumers.

show abstract

Net Neutrality, Foreclosure and the Fast Lane: An Empirical Study of the UK

Cited by 10 publications

References 12 publications

Zero-rating, content quality, and network capacity

Zero-rating, content quality, and network capacity

The Economics of Television and Online Video Markets

Zero Rating, Content Quality and Network Capacity

Contact Info

Product

Resources

About