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

Information Systems Research (December 2012 vol. 23 no. 4, 1303-1321)

36 Pages Posted: 5 Aug 2009 Last revised: 28 Oct 2013

Jan Kraemer

University of Passau

Lukas Wiewiorra

Goethe University Frankfurt

Date Written: 2012

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.

Keywords: Telecommunications, Internet, Net Neutrality, Quality of Service, Content Variety, Investment, Regulation, Minimum Quality Standards

JEL Classification: D4, L12, L43, L51, L52, L96

Suggested Citation

Kraemer, Jan and Wiewiorra, Lukas, Network Neutrality and Congestion Sensitive Content Providers: Implications for Content Variety, Broadband Investment and Regulation (2012). Information Systems Research (December 2012 vol. 23 no. 4, 1303-1321). Available at SSRN: https://ssrn.com/abstract=1444423 or http://dx.doi.org/10.2139/ssrn.1444423

Jan Kraemer (Contact Author)

University of Passau ( email )

Chair of Internet and Telecommunications Business
Dr.-Hans-Kapfinger-Str. 12
Passau, D-94036
Germany
+498515092580 (Phone)
+498525092582 (Fax)

HOME PAGE: http://www.kraemer.biz

Lukas Wiewiorra

Goethe University Frankfurt ( email )

Theodor-W.-Adorno-Platz 3
Frankfurt am Main, 60323
Germany
+49 (0)69 798 34708 (Phone)
+49 (0)69 798 763 34708 (Fax)

HOME PAGE: http://lukas.wiewiorra.com

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