A study of non-neutral networks with usage-based prices

  • Authors:
  • Eitan Altman;Pierre Bernhard;Stephane Caron;George Kesidis;Julio Rojas-Mora;Sulan Wong

  • Affiliations:
  • INRIA, Sophia-Antipolis, France;INRIA, Sophia-Antipolis, France;CS&E and EE Depts, Pennsylvania State Univ., University Park, PA;CS&E and EE Depts, Pennsylvania State Univ., University Park, PA;Fac. of Econ. and Bus. Sci., Univ. of Barcelona, Barcelona, Spain;Fac. of Law, Univ. of Coruña, A Coruña, Spain

  • Venue:
  • ETM'10 Proceedings of the Third international conference on Incentives, overlays, and economic traffic control
  • Year:
  • 2010

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Abstract

Hahn and Wallsten [1] wrote that network neutrality "usually means that broadband service providers charge consumers only once for Internet access, do not favor one content provider over another, and do not charge content providers for sending information over broadband lines to end users." We study the implications of non-neutral behaviors under a simple model of linear demand-response to usage-based prices. We take into account advertising revenues for the content provider and consider both cooperative and non-cooperative scenarios. We show that by adding the option for one provider to determine the amount of side payment from the other provider, not only do the content provider and the internaut suffer, but also the Access Provider's performance degrades.