Network Neutrality and Congestion Sensitive Content Providers: Implications for Content Variety, Broadband Investment and Regulation

Abstract

We study departures from network neutrality through implementing a Quality of Service tiering regime in which an ISP charges for prioritization on a non-discriminatory basis. We find that Quality of Service tiering may be more efficient in the short run, because it better allocates the existing network capacity, and in the long run, because it provides higher investment incentives due to the increased demand for priority services by the entry of new congestion sensitive content providers. Which network regime is the most efficient depends on the distribution of congestion sensitivity among content providers, but a guideline is that the regime that provides higher incentives for infrastructure investments is more efficient in the long run.

Net Neutrality, Network Capacity, and Innovation at the Edges

“…This result extends the waiting cost equivalence characterized in Choi and Kim [], Bourreau et al . [] and Krämer and Wiewiorra [] to a more generalized queuing system that allows for a content provider's investment for QoS enhancement and its spillover effects. Intuitively, the total waiting time must depend on the network capacity and the total packet size to be delivered regardless of whether or not a subset of the packets is prioritized.Property For a given pair of , prioritizing the MCP's traffic reduces the total delay cost: i.e., for any This is because the MCP's content is assumed to be more sensitive to congestion ( and the prioritization allocates more congestion‐sensitive content to the faster lane.…”

Net Neutrality with Competing Internet Platforms

“…Choi and Kim [2010] and Cheng et al [2011] study models with a monopolistic ISP and a fixed number of CP's (two) who can access a fast lane by paying a priority fee and the ISP invests in capacity. Krämer and Wiewiorra [2012] extend this framework by considering a continuum of heterogeneous congestion-sensitive CPs.…”

Economics of Quality Sponsored Data in Non-Neutral Networks

“…Impact of v 1 and v 2 on the social welfare: If we define the social welfare of the QSD regime as the sum of the payoffs of the CP and the SP 19 , then important parameters for determining the social welfare of the system are v 1 and v 2 (can be imposed by the regulator), and D. In this case, if v2 v1 or D are high, i.e. when the weight on the content of a non-sponsored content is high, then the SP restricts the number of bits she offers for sponsoring by quoting a high sponsorship fee (as explained before).…”

“…Therefore, again in the regions that support an 18 Note that in this case the logarithm in (1) is negative for a quality near the minimum quality. 19 Note that the payoff of the SP includes a term for users' satisfaction function that captures the welfare of EUs for sponsored and non-sponsored contents (possibly with constants different from v 1 and v 2 ). In addition, the effect of the model on other CPs is also hidden in the users' satisfaction function (the term v 2 D log(κ SP N −b t D )).…”