Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/205182 
Year of Publication: 
2019
Series/Report no.: 
30th European Conference of the International Telecommunications Society (ITS): "Towards a Connected and Automated Society", Helsinki, Finland, 16th-19th June, 2019
Publisher: 
International Telecommunications Society (ITS), Calgary
Abstract: 
We consider internet service providers' incentives to zero-rate, i.e. do not count towards data allowances, the consumption of certain services, in the absence of payments from content providers. In a general model with various types of network effects, service substitutes or complements, monopoly and duopoly, we show that ISPs adopt zero-rating and that it increases consumer surplus and total welfare if network effects are strong enough. Capacity investment increases (decreases) with network effects if services are complements (substitutes). Under competition, the decision to zero-rate depends the residual network effect, which includes the impacts of spillovers and brand differentiation.
Subjects: 
Zero-rating
Network effects
Net neutrality
Capacity Investment
JEL: 
D21
L51
L96
Document Type: 
Conference Paper

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