On the Invariance Result of Net Neutrality

Abstract

Abstract In an influential paper, Choi and Kim (2010) established the invariance result that given a fixed network capacity, the average waiting times are identical regardless of net neutrality. In this paper, we argue that their result relies on the assumption that the distribution for content requests per end user is the same regardless of net neutrality. However, if the distribution is determined by the underlying utility maximization problem of users, users expect the contents they request to be transmitted faster if the contents have priority, implying that the request rate for prioritized contents is higher than the request rate for unprioritized contents under net neutrality. If the content request rates per user differ across the two regimes (net neutrality vs. no net neutrality), the invariance result may not be valid. We also discuss social welfare and the investment incentive of the Internet service provider in an extended model with variable content request rates.