Net Neutrality and CDN Intermediation

Aufsätze referiert extern - Web of Science 2019

Pio Baake, Slobodan Sudaric

In: Information Economics and Policy 46 (2019), S. 55-67

Abstract

We analyze competition between Internet Service Providers (ISPs) where consumers demand heterogeneous content within two Quality-of-Service (QoS) regimes, Net Neutrality and Paid Prioritization, and show that paid prioritization increases the static efficiency compared to a neutral network. We also consider paid prioritization intermediated by Content Delivery Networks (CDNs). While the use of CDNs is welfare neutral, it results in higher consumer prices for internet access. Regarding incentives to invest in network capacity we show that prioritization regimes lead to higher incentives than the neutral regime as long as capacity is scarce, while investment is highest in the presence of CDNs.

Pio Baake

Kommissarischer Abteilungsleiter in der Abteilung Wettbewerb und Verbraucher



JEL-Classification: L13;L51;L96
Keywords: Content delivery network, Investment, Net neutrality, Prioritization
DOI:
https://doi.org/10.1016/j.infoecopol.2019.01.003