Authors: Emin Köksal
Addresses: Department of Economics, Bahçesehir University, Çiragan Cd., No. 4, 34353 Istanbul, Turkey
Abstract: This paper examines the welfare implications of a network management regime which substitutes a network neutrality regime. Under the network management regime, we allow internet service providers (ISPs) to differentiate their network connections through some quality of service (QoS) tools. We find that ISPs| profit increases through creation of a special lane for paying content/application providers (CAPs), both in monopoly and in duopoly models. Similarly, end-users (Es) gain more surplus under the network management regime. However, non-paying CAPs are excluded from the market as degradation level in their lane increases.
Keywords: internet; network neutrality; network management; two-sided market; quality of service; QoS differentiation; net neutrality; welfare; network management.
International Journal of Management and Network Economics, 2011 Vol.2 No.1, pp.39 - 57
Available online: 17 Sep 2011 *Full-text access for editors Access for subscribers Purchase this article Comment on this article