Effects of Competition Among Internet Service Providers and Content Providers on the Net Neutrality Debate

86 Pages Posted: 24 Nov 2014 Last revised: 22 May 2015

See all articles by Hong Guo

Hong Guo

University of Notre Dame

Subhajyoti Bandyopadhyay

University of Florida - Warrington College of Business Administration

Arthur Lim

University of Notre Dame

Yu-Chen Ben Yang

National Sun Yat-sen University - College of Management

Hsing Kenneth Cheng

University of Florida - Warrington College of Business

Date Written: May 15, 2015

Abstract

Supporters of net neutrality have often argued that more competition among Internet service providers (ISPs) is beneficial for an open Internet and that the market power of the ISPs lies at the heart of the net neutrality debate. However, the joint effects of the competition among ISPs and among content providers (CPs) have yet to be examined. We study the critical linkage between ISP competition and CP competition, as well as its policy implications. We find that even under competitive pressure from a rival ISP, an ISP still has the incentive and the ability to enforce charging CPs for priority delivery of content. Upending the commonly held belief that when facing direct competition CPs will always support the preservation of net neutrality, we find that under certain conditions, it is economically beneficial for the dominant CP to reverse its stance on net neutrality. Our paper also makes an important contribution in extending the traditional multi-dimensional spatial-competition literature.

Keywords: Net Neutrality, Internet Service Provider Competition, Content Provider Competition, Packet Discrimination, Social Welfare

Suggested Citation

Guo, Hong and Bandyopadhyay, Subhajyoti and Lim, Arthur and Yang, Yu-Chen Benjamin and Cheng, Hsing Kenneth, Effects of Competition Among Internet Service Providers and Content Providers on the Net Neutrality Debate (May 15, 2015). Available at SSRN: https://ssrn.com/abstract=2529693 or http://dx.doi.org/10.2139/ssrn.2529693

Hong Guo (Contact Author)

University of Notre Dame ( email )

356 Mendoza College of Business
Notre Dame, IN 46556-5646
United States

HOME PAGE: http://www.nd.edu/~hguo

Subhajyoti Bandyopadhyay

University of Florida - Warrington College of Business Administration ( email )

Gainesville, FL 32611
United States

Arthur Lim

University of Notre Dame ( email )

Department of Mathematics
255 Hurley
Notre Dame, IN 46556-5646
United States

Yu-Chen Benjamin Yang

National Sun Yat-sen University - College of Management ( email )

No. 70, Lienhai Rd.
Kaohsiung, 80424
Taiwan

Hsing Kenneth Cheng

University of Florida - Warrington College of Business ( email )

P.O. Box 117169
Gainesville, FL 32611-7169
United States
352-392-7068 (Phone)
352-392-5438 (Fax)

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