Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/129587
Authors: 
Peitz, Martin
Schuett, Florian
Year of Publication: 
2015
Series/Report no.: 
Working Paper Series, Department of Economics, University of Mannheim 15-05
Abstract: 
Under strict net neutrality Internet service providers (ISPs) are required to carry data without any differentiation and at no cost to the content provider. We provide a simple framework with a monopoly ISP to evaluate different net neutrality rules. Content differs in its sensitivity to delay. Content providers can use congestion control techniques to reduce delay for their content, but do not take into account the effect of their decisions on the aggregate volume of traffic. As a result, strict net neutrality often leads to socially inefficient traffic in ation. We show that piece-meal departures from net neutrality, such as transmission fees or prioritization based on sensitivity to delay, do not necessarily improve efficiency. However, allowing the ISP to introduce bandwidth tiering and charge for prioritized delivery can implement the efficient allocation.
Subjects: 
Net neutrality
network congestion
telecommunications
quality of service
JEL: 
L12
L51
L86
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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