Network Neutrality in the Internet with Congestion Sensitive End Users and Content Providers Yoǧunluia Duyarli Son Kullanicilar ve Içerik Saǧlayicilar ile Internette Aǧ Tarafsizliǧi

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Kaplanlioǧlu Ö., Ecer S.

Bogazici Journal, vol.36, no.2, pp.40-81, 2023 (Scopus) identifier identifier

  • Publication Type: Article / Article
  • Volume: 36 Issue: 2
  • Publication Date: 2023
  • Doi Number: 10.21773/boun.36.2.1
  • Journal Name: Bogazici Journal
  • Journal Indexes: Scopus, ABI/INFORM, EconLit, Geobase, TR DİZİN (ULAKBİM)
  • Page Numbers: pp.40-81
  • Keywords: Network neutrality, Telecommunication, Two-sided markets
  • Istanbul Technical University Affiliated: Yes

Abstract

In this paper, we envision a two-sided market mediated by a monopolistic internet service provider, ISP. The ISP provides end-users internet access and carries content providers' (CPs') data packages on its network. We compare the case where network neutrality is strictly practiced with the case where the ISP can "throttle" the traffic of certain content providers. In the model, for simplicity, a single CP is exposed to throttling, while the other CPs, which are part of a continuum, are not. We then study the implications of the violation of network neutrality on total data consumption, congestion, and capacity investment. We show that under discrimination, the ISP charges a lower price to end-users. Paradoxically, this lower price leads to lower data volume in some cases because while the lower price for end-users has an increasing effect on demand for data, lower capacity investment causes more congestion and decreases the demand for data.