Network Neutrality and the Nature of Competition between Network Operators

Abstract

The neutral architecture of the Internet is being challenged by various parties, such as network operators providing the connections to end-users, who are interested in gaining control of the information exchanged over the Internet. What are the effects on competition and welfare of such practices? Currently, there exists very little economic theory on network neutrality. This paper provides a preliminary analysis of the type of economic modeling that can address network neutrality, as well as of the type of results that can be expected.

Keywords: Network neutrality, Discriminating practices, Product differentiation, Imperfect competition, Regulation

JEL Classification: L13, L51, L96