Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/184965
Authors: 
Schnurr, Daniel
Wiewiorra, Lukas
Year of Publication: 
2018
Series/Report no.: 
29th European Regional Conference of the International Telecommunications Society (ITS): "Towards a Digital Future: Turning Technology into Markets?", Trento, Italy, 1st - 4th August, 2018
Abstract: 
Zero rating and sponsored data have recently been introduced as new tari↵ options in mobile telecommunications markets. Both practices exempt data traffic of specific Internet services from an Internet user's download limit and thus allow for unlimited consumption of the respective content. Whereas network operators have advertised these options as consumer-friendly innovations, both practices have been criticized by net neutrality proponents and are currently under regulatory scrutiny in several countries. Based on a model of a monopolistic Internet access provider and two advertising-financed content providers, we investigate market outcomes under both zero rating and sponsored data and assess optimal pricing schemes, firms' profits, consumer surplus and total welfare. We then analyze welfare e↵ects if network operators are prohibited from o↵ering service-specific exemptions from users' data allowance and derive policy implications for the current regulatory debate on net neutrality.
Subjects: 
Internet access
data caps
zero rating
sponsored data
price discrimination
net neutrality
regulation
public policy
Document Type: 
Conference Paper

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