Weak versus Strong Net Neutrality: Correction and Extensions

17 Pages Posted: 19 Feb 2016 Last revised: 1 Aug 2016

See all articles by Joshua S. Gans

Joshua S. Gans

University of Toronto - Rotman School of Management; NBER

Michael L. Katz

University of California, Berkeley - Department of Economics; Haas School of Business

Multiple version iconThere are 2 versions of this paper

Date Written: May 4, 2016

Abstract

We correct and extend the results of Gans (2015) regarding the effects of net neutrality regulation on equilibrium outcomes in settings where a content provider sells its services to consumers for a fee. We examine both pricing and investment effects. We extend the earlier paper’s result that weak forms of net neutrality are ineffective and also show that even a strong form of net neutrality may be ineffective. In addition, we demonstrate that, when strong net neutrality does affect the equilibrium outcome, it may harm efficiency by distorting both ISP and content provider investment and service-quality choices.

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

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

Suggested Citation

Gans, Joshua S. and Katz, Michael L., Weak versus Strong Net Neutrality: Correction and Extensions (May 4, 2016). Rotman School of Management Working Paper No. 2733826, Available at SSRN: https://ssrn.com/abstract=2733826 or http://dx.doi.org/10.2139/ssrn.2733826

Joshua S. Gans (Contact Author)

University of Toronto - Rotman School of Management ( email )

Canada

HOME PAGE: http://www.joshuagans.com

NBER ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Michael L. Katz

University of California, Berkeley - Department of Economics ( email )

579 Evans Hall
Berkeley, CA 94709
United States

Haas School of Business ( email )

Berkeley, CA 94720
United States

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