{"title":"Welfare Implications of Deviation from Network Neutrality: A Price Discrimination Application","authors":"Emin Köksal","doi":"10.4018/JITN.2010040102","DOIUrl":null,"url":null,"abstract":"This paper investigates how incentives of network operators to deviate from neutrality may create social costs or benefits in different market structures. The deviation from network neutrality is a general form of discrimination based on charging different prices for non-affiliated content and application providers. In this paper, deviation from network neutrality is formulated as a form of vertical foreclosure. While constructing the model two-sided nature of the internet service, the providing market is considered. The author found that, although monopoly network operators have no incentive to deviate from neutrality, the duopoly network operators have this incentive. Welfare analysis suggests destructive results for almost all participants, hence the total surplus in both market structures. In addition, the analysis for the degree of integration between the network operators and their affiliated content and application providers, suggest some policy proposals to discourage their degree of integration.","PeriodicalId":42285,"journal":{"name":"International Journal of Interdisciplinary Telecommunications and Networking","volume":"2 1","pages":"27-49"},"PeriodicalIF":0.4000,"publicationDate":"2010-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"8","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"International Journal of Interdisciplinary Telecommunications and Networking","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.4018/JITN.2010040102","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q4","JCRName":"TELECOMMUNICATIONS","Score":null,"Total":0}
引用次数: 8
Abstract
This paper investigates how incentives of network operators to deviate from neutrality may create social costs or benefits in different market structures. The deviation from network neutrality is a general form of discrimination based on charging different prices for non-affiliated content and application providers. In this paper, deviation from network neutrality is formulated as a form of vertical foreclosure. While constructing the model two-sided nature of the internet service, the providing market is considered. The author found that, although monopoly network operators have no incentive to deviate from neutrality, the duopoly network operators have this incentive. Welfare analysis suggests destructive results for almost all participants, hence the total surplus in both market structures. In addition, the analysis for the degree of integration between the network operators and their affiliated content and application providers, suggest some policy proposals to discourage their degree of integration.
期刊介绍:
The International Journal of Interdisciplinary Telecommunications and Networking (IJITN) examines timely and important telecommunications and networking issues, problems, and solutions from a multidimensional, interdisciplinary perspective for researchers and practitioners. IJITN emphasizes the cross-disciplinary viewpoints of electrical engineering, computer science, information technology, operations research, business administration, economics, sociology, and law. The journal publishes theoretical and empirical research findings, case studies, and surveys, as well as the opinions of leaders and experts in the field. The journal''s coverage of telecommunications and networking is broad, ranging from cutting edge research to practical implementations. Published articles must be from an interdisciplinary, rather than a narrow, discipline-specific viewpoint. The context may be industry-wide, organizational, individual user, or societal. Topics Covered: -Emerging telecommunications and networking technologies -Global telecommunications industry business modeling and analysis -Network management and security -New telecommunications applications, products, and services -Social and societal aspects of telecommunications and networking -Standards and standardization issues for telecommunications and networking -Strategic telecommunications management -Telecommunications and networking cultural issues and education -Telecommunications and networking hardware and software design -Telecommunications investments and new ventures -Telecommunications network modeling and design -Telecommunications regulation and policy issues -Telecommunications systems economics