Weak versus Strong Net Neutrality

Joshua S. Gans

University of Toronto - Rotman School of Management; NBER

November 18, 2014

Rotman School of Management Working Paper No. 2439360

This paper provides a framework to classify and evaluate the impact of net neutrality regulations on the allocation of consumer attention and the distribution of surplus between consumers, ISPs and content providers. While the model provided largely nests other contributions in the literature, here the focus is on including direct payments from consumers to content providers. With this additional price it is demonstrated that the type of net neutrality regulation (i.e., weak versus strong net neutrality) matters for such regulations to have real effects. In addition, we provide support for the notion that strong net neutrality may stimulate content provider investment while the model concludes that there is unlikely to be any negative impact from such regulation on ISP investment. Counter to many claims, it is argued here that ISP competition may not be a substitute for net neutrality regulation in bringing about these effects.

Number of Pages in PDF File: 25

Keywords: regulation, net neutrality, internet service providers, content providers, infrastructure investment

JEL Classification: L1, D4, L12, L13, C63, D42, D43

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Date posted: May 21, 2014 ; Last revised: November 19, 2014

Suggested Citation

Gans, Joshua S., Weak versus Strong Net Neutrality (November 18, 2014). Rotman School of Management Working Paper No. 2439360. Available at SSRN: https://ssrn.com/abstract=2439360 or http://dx.doi.org/10.2139/ssrn.2439360

Contact Information

Joshua S. Gans (Contact Author)
University of Toronto - Rotman School of Management ( email )
HOME PAGE: http://www.joshuagans.com

NBER ( email )
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
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