Network Neutrality and Network Management Regulation: Quality of Service, Price Discrimination, and Exclusive Contracts

29 Pages Posted: 24 Apr 2012  

Nicholas Economides

New York University - Leonard N. Stern School of Business - Department of Economics

Joacim Tåg

Research Institute of Industrial Economics (IFN)

Multiple version iconThere are 2 versions of this paper

Date Written: December 10, 2011

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

JEL Classification: L10, D40, L12, L13, C63, D42, D43

Suggested Citation

Economides, Nicholas and Tåg, Joacim, Network Neutrality and Network Management Regulation: Quality of Service, Price Discrimination, and Exclusive Contracts (December 10, 2011). IFN Working Paper No. 890. Available at SSRN: https://ssrn.com/abstract=2045623 or http://dx.doi.org/10.2139/ssrn.2045623

Nicholas Economides

New York University - Leonard N. Stern School of Business - Department of Economics ( email )

44 West 4th Street
New York, NY 10012
United States
212-998-0864 (Phone)
212-995-4218 (Fax)

HOME PAGE: http://www.stern.nyu.edu/networks/

Joacim Tåg (Contact Author)

Research Institute of Industrial Economics (IFN) ( email )

Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15
Sweden

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