The Economics of Zero-Rating and Net Neutrality
(2016) , 1 pages
Files
coredp2016_47web.pdf
Open Access - Adobe PDF
- 456.28 KB
Details
- Authors
- Abstract
- This paper studies zero-rating, an emerging business practice consisting in a mobile internet service provider (ISP) excluding the data generated by certain content providers (CPs) from its consumers' monthly data cap. Being at odds with the principle of net neutrality, these arrangements have recently attracted regulatory scrutiny all over the word. I analyze zero-rating incentives of a monopolistic ISP facing a capacity constraint in a two-sided market where consumption provides utility for homogeneous consumers as well as advertising revenue for CPs. Focusing on a market with two CPs competing with each other and all other content which is never zero-rated, I identify parameter regions in which zero, one or two CPs are zero-rated. Surprisingly, the ISP may zero rate content when it is either very unattractive or very attractive for consumers, but not in the intermediary region.
- Affiliations
Citations
Somogyi, R. (2016). The Economics of Zero-Rating and Net Neutrality (CORE Discussion Paper 2016/47). https://hdl.handle.net/2078.5/180037