The consequences of Net Neutrality
https://doi.org/10.38050/2078-3809-2024-16-4-48-68
Abstract
Net Neutrality has a great impact on the functioning of the market of Internet service providers (ISPs) and social welfare. In this paper, in order to draw conclusions about the consequences of Net Neutrality, an analysis of articles exploring various aspects of Net Neutrality was carried out. It was concluded that the zero-price rule stimulates the emergence of new content, but reduces consumer surplus, affects the investments of ISPs and content providers and can both increase and decrease the total social welfare. A ban on degrading the quality of competitors' content is required only in cases where these Internet services are of great value to consumers and the ISPs’ own services can serve as a high-quality substitute for them. Net Neutrality reduces the likelihood of Internet fragmentation, which can weaken competition between ISPs and positively or negatively affect their investments. It was found that competition between ISPs makes it unnecessary to ban the sale of premium quality content deliverу, but does not eliminate the need for other prohibitions imposed by Net Neutrality.
About the Author
M. M. Taipov
Lomonosov Moscow State University
Russian Federation
Russian Federation
Mikhail M. Taipov, Graduate Student. Faculty of Economics
Moscow
References
1. Shastitko A.E., Parshina E.N. Rynki s dvustoronnimi setevymi effektami: spetsifikatsiya predmetnoĭ oblasti. Sovremennaya konkurentsiya. 2016. Vol. 10. No. 1. P. 5-18. (In Russ.).
2. Armstrong M. Competition in Two-Sided Markets. The RAND Journal of Economics. 2006. Vol. 37. No. 3. P. 668–691. DOI: 10.1111/j.1756-2171.2006.tb00037.x.
3. Baake P., Sudaric S. Net neutrality and CDN intermediation. Information Economics and Policy. 2019. Vol. 46. P. 55-67. DOI: 10.1016/j.infoecopol.2019.01.003.
4. Berges F., Chambolle C. Threat of Exit as a Source of Bargaining Power. Recherches economiques de Louvain. 2009. Vol. 75. No. 3. P. 353–368. DOI: 10.3917/rel.753.0353.
5. Bourreau M., Kourandi F., Valletti T. Net neutrality with competing internet platforms. Journal of Industrial Economics. 2014. Vol. 63. No. 1. P. 30–73. DOI: 10.1111/joie.12068.
6. Caves K.W. Modeling the welfare effects of net neutrality regulation: A Comment on Economides and Tåg. Information Economics and Policy. 2012. Vol. 24. No. 3–4. P. 288–292. DOI: 10.1016/j.infoecopol.2012.07.002.
7. Chen M. K., Nalebuff B. One-way essential complements.Cowles Foundation Discussion Paper No. 1588, Yale School of Management. 2006. DOI: 10.2139/ssrn.937384. Information Systems Research. 2011. Vol. 22. No. 1. P. 60–82. DOI: 10.1287/isre.1090.0257 DOI:10.3917/res.173.0097.
8. D’ Annunzio A., Russo A. Net Neutrality and internet fragmentation: The role of online advertising. International Journal of Industrial Organization. 2015. Vol. 43. P. 30–47. DOI: 10.1016/j.ijindorg.2015.07.009.
9. Davidovici-Nora M., Bourreau M. Two-sided markets in the video game industry. Reseaux. 2012. Vol. 173–174. No. 3. P. 97–135.
10. Economides N. Net-neutrality, non-discrimination and digital distribution of content through the Internet. I/S: A Journal of Law and Policy for the Information Society. 2008. Vol. 4. No. 2. P. 209–233. DOI: 10.2139/ssrn.977096.
11. Economides N., Tag J. Network neutrality on the Internet: A two-sided market analysis. Information Economics and Policy. 2012a. Vol. 24. No. 2. P. 91–104. DOI: 10.1016/j.infoecopol.2012.01.001.
12. Economides N., Tag J. Modelling the welfare effects of network neutrality regulation: A response to Caves’s comment. Information Economics and Policy. 2012b. Vol. 24. No. 3–4. P. 293. DOI: 10.1016/j.infoecopol.2012.08.004.
13. Garrett T., Setenareski L. E., Peres L.M et al. A survey of Network Neutrality regulations worldwide. Computer Law and Security Review. 2022. Vol. 44. P. 1-19. DOI: 10.1016/j.clsr.2022.105654.
14. Hagiu A., Wright J. Multi-sided platforms. International Journal of Industrial Organization. 2015. Vol. 43. P. 162–174. DOI: 10.1016/j.ijindorg.2015.03.003.
15. Hass D.A. The Never-Was-Neutral Net and Why Informed End Users Can End the Net Neutrality Debates. Berkeley Technology Law Journal. 2007. Vol. 22. No. 4. P. 1565–1635.
16. Jamison M.A., Hauge J.A. Getting What You Pay for: Analyzing the Net Neutrality Debate. TPRC 2007. 2008. DOI: 10.2139/ssrn.1081690.
17. Kocsis V., Bijl P.W. Network neutrality and the nature of competition between network operators. International Economics and Economic Policy. 2007. Vol. 4. P. 159–184. DOI: 10.1007/s10368-007-0082-8.
18. Kourandi F., Kramer J., Valletti T.M. Net Neutrality, Exclusivity Contracts and Internet Fragmentation. Information Systems Research. 2015. P. 1–19. DOI: 10.1287/isre.2015.0567.
19. Kramer J., Wiewiorra L., Weinhardt C. Net neutrality: A progress report. Telecommunications Policy. 2013. Vol. 37. P. 794–813. DOI: 10.1016/j.telpol.2012.08.005.
20. Lee R.S., Wu T. Subsidizing Creativity through Network Design: Zero-Pricing and Net Neutrality. Journal of Economic Perspectives. 2009. Vol. 23. No. 3. P. 61–76. DOI: 10.1257/jep.23.3.61.
21. Musacchio J., Schwartz G., Walrand J. A two-sided market analysis of provider investment incentives with an application to the net-neutrality issue. Review of Network Economics. 2009. Vol. 8. No. 1. P. 22–39. DOI: 10.2202/1446-9022.1168.
22. Nurski L. Net Neutrality, Foreclosure and the Fast Lane: An Empirical Study of the UK. NET Institute Working Paper. 2012. No. 12–13. DOI: 10.2139/ssrn.2164382.
23. Schuett F. Network Neutrality: A Survey of the Economic Literature. Review of Network Economics. 2010. Vol. 9. No. 2. P. 1–15. DOI: 10.2202/1446-9022.1224.
24. Rochet J.-C., Tirole J. Two-sided markets: a progress report. The RAND Journal of Economics. 2006. Vol. 37. No. 3. P. 645–667. DOI: 10.1111/j.1756-2171.2006.tb00036.x.
25. Rysman M. The economics of two-sided markets. Journal of Economic Perspectives. 2009. Vol. 23. No. 3. P. 125–143. DOI: 10.1257/jep.23.3.125.
26. Wu T. Network Neutrality, Broadband Discrimination. Journal of Telecommunications and High Technology Law. 2003. Vol. 2. P. 141–179. DOI: 10.2139/ssrn.388863.
27. Mintsifry khochet obyazat' platformy platit' operatoram za «sushchestvennye ob"emy trafika». Forbes: Available at: https://www.forbes.ru/tekhnologii/497479-mincifry-hocet-obazat-platformy-platit-operatoram-za-susestvennye-obemy-trafika (accessed: 28.02.2024). (In Russ.).
28. Chinovniki sokhranili setevoy neytralitet. Kommersant: Available at: https://www.kommersant.ru/doc/4334716 (accessed: 22.12.2023). (In Russ.).
29. F.C.C. Approves Net Neutrality Rules, Classifying Broadband Internet Service as a Utility. The New York Times: Available at: https://www.nytimes.com/2015/02/27/technology/net-neutrality-fcc-vote-internet-utility.html (accessed: 22.12.2023).
30. FCC votes to move forward with net neutrality rollback. CNN Business: Available at: https://money.cnn.com/2017/05/18/technology/fcc-net-neutrality-vote/index.html (accessed: 22.12.2023).
31. FCC begins push to reinstate net neutrality. Total Telecom: Available at: https://totaltele.com/fcc-begins-push-to-reinstate-net-neutrality/ (accessed: 22.12.2023).
32. Justice Dept. probes whether Comcast and Time Warner 'data limits' are blocking competition from online video. Mail Online: Available at: https://www.dailymail.co.uk/news/article-2159093/Justice-Department-investigating-cable-company-data-limits-block-competition-online-video.html (accessed: 20.04.2024).
33. Verizon, NFL: $1B Sunday mobile deal. New York Post: Available at: https://nypost.com/2013/06/05/verizon-nfl-1b-sunday-mobile-deal/ (accessed: 13.07.2024).
Review
For citations:
Taipov M.M. The consequences of Net Neutrality. Scientific Research of Faculty of Economics. Electronic Journal. 2024;16(4):48-68. (In Russ.) https://doi.org/10.38050/2078-3809-2024-16-4-48-68
Views:
52
Email this article 