Migration to a non-neutral internet: Economics modeling and analysis of impact

Mohammad Hassan Lotfi, Saswati Sarkar, George Kesidis

Research output: Chapter in Book/Report/Conference proceedingConference contribution

1 Citation (Scopus)

Abstract

Net neutrality on the Internet is perceived as the policy that mandates Internet Service Providers (ISPs) to treat all data equally, regardless of the source, destination, and type of the data. In this work, we consider a scheme in which there exist two ISPs, one Content Provider (CP), and a continuum of end-users. One of the ISPs are neutral and the other is non-neutral, i.e. she offers a premium quality to a CP in exchange of a side-payment. In addition, we consider that the CP can differentiate between ISPs by controlling the quality of the content she is offering on each one. We consider a near-perfect competition between ISPs, i.e. a scenario that none of the ISPs has high market power, and formulate the game as a sequential game. We show that there exist a unique SPNE for the game. In the unique SPNE outcome of the game, the CP pays the side-payment to the non-neutral ISP and offers her content with the premium quality. On the other hand, the CP does not offer her content on the neutral ISP. Thus, the neutral ISP would be driven out of the market. We show that in this case, a neutral regime yields a higher end-user welfare than a non-neutral regime.

Original languageEnglish (US)
Title of host publication2016 50th Annual Conference on Information Systems and Sciences, CISS 2016
PublisherInstitute of Electrical and Electronics Engineers Inc.
Pages511-516
Number of pages6
ISBN (Electronic)9781467394574
DOIs
StatePublished - Apr 26 2016
Event50th Annual Conference on Information Systems and Sciences, CISS 2016 - Princeton, United States
Duration: Mar 16 2016Mar 18 2016

Publication series

Name2016 50th Annual Conference on Information Systems and Sciences, CISS 2016

Other

Other50th Annual Conference on Information Systems and Sciences, CISS 2016
CountryUnited States
CityPrinceton
Period3/16/163/18/16

Fingerprint

Internet service providers
Internet
Economics

All Science Journal Classification (ASJC) codes

  • Computer Networks and Communications
  • Information Systems

Cite this

Lotfi, M. H., Sarkar, S., & Kesidis, G. (2016). Migration to a non-neutral internet: Economics modeling and analysis of impact. In 2016 50th Annual Conference on Information Systems and Sciences, CISS 2016 (pp. 511-516). [7460555] (2016 50th Annual Conference on Information Systems and Sciences, CISS 2016). Institute of Electrical and Electronics Engineers Inc.. https://doi.org/10.1109/CISS.2016.7460555
Lotfi, Mohammad Hassan ; Sarkar, Saswati ; Kesidis, George. / Migration to a non-neutral internet : Economics modeling and analysis of impact. 2016 50th Annual Conference on Information Systems and Sciences, CISS 2016. Institute of Electrical and Electronics Engineers Inc., 2016. pp. 511-516 (2016 50th Annual Conference on Information Systems and Sciences, CISS 2016).
@inproceedings{46067516732b4f18b3e5bd46540ad53c,
title = "Migration to a non-neutral internet: Economics modeling and analysis of impact",
abstract = "Net neutrality on the Internet is perceived as the policy that mandates Internet Service Providers (ISPs) to treat all data equally, regardless of the source, destination, and type of the data. In this work, we consider a scheme in which there exist two ISPs, one Content Provider (CP), and a continuum of end-users. One of the ISPs are neutral and the other is non-neutral, i.e. she offers a premium quality to a CP in exchange of a side-payment. In addition, we consider that the CP can differentiate between ISPs by controlling the quality of the content she is offering on each one. We consider a near-perfect competition between ISPs, i.e. a scenario that none of the ISPs has high market power, and formulate the game as a sequential game. We show that there exist a unique SPNE for the game. In the unique SPNE outcome of the game, the CP pays the side-payment to the non-neutral ISP and offers her content with the premium quality. On the other hand, the CP does not offer her content on the neutral ISP. Thus, the neutral ISP would be driven out of the market. We show that in this case, a neutral regime yields a higher end-user welfare than a non-neutral regime.",
author = "Lotfi, {Mohammad Hassan} and Saswati Sarkar and George Kesidis",
year = "2016",
month = "4",
day = "26",
doi = "10.1109/CISS.2016.7460555",
language = "English (US)",
series = "2016 50th Annual Conference on Information Systems and Sciences, CISS 2016",
publisher = "Institute of Electrical and Electronics Engineers Inc.",
pages = "511--516",
booktitle = "2016 50th Annual Conference on Information Systems and Sciences, CISS 2016",
address = "United States",

}

Lotfi, MH, Sarkar, S & Kesidis, G 2016, Migration to a non-neutral internet: Economics modeling and analysis of impact. in 2016 50th Annual Conference on Information Systems and Sciences, CISS 2016., 7460555, 2016 50th Annual Conference on Information Systems and Sciences, CISS 2016, Institute of Electrical and Electronics Engineers Inc., pp. 511-516, 50th Annual Conference on Information Systems and Sciences, CISS 2016, Princeton, United States, 3/16/16. https://doi.org/10.1109/CISS.2016.7460555

Migration to a non-neutral internet : Economics modeling and analysis of impact. / Lotfi, Mohammad Hassan; Sarkar, Saswati; Kesidis, George.

2016 50th Annual Conference on Information Systems and Sciences, CISS 2016. Institute of Electrical and Electronics Engineers Inc., 2016. p. 511-516 7460555 (2016 50th Annual Conference on Information Systems and Sciences, CISS 2016).

Research output: Chapter in Book/Report/Conference proceedingConference contribution

TY - GEN

T1 - Migration to a non-neutral internet

T2 - Economics modeling and analysis of impact

AU - Lotfi, Mohammad Hassan

AU - Sarkar, Saswati

AU - Kesidis, George

PY - 2016/4/26

Y1 - 2016/4/26

N2 - Net neutrality on the Internet is perceived as the policy that mandates Internet Service Providers (ISPs) to treat all data equally, regardless of the source, destination, and type of the data. In this work, we consider a scheme in which there exist two ISPs, one Content Provider (CP), and a continuum of end-users. One of the ISPs are neutral and the other is non-neutral, i.e. she offers a premium quality to a CP in exchange of a side-payment. In addition, we consider that the CP can differentiate between ISPs by controlling the quality of the content she is offering on each one. We consider a near-perfect competition between ISPs, i.e. a scenario that none of the ISPs has high market power, and formulate the game as a sequential game. We show that there exist a unique SPNE for the game. In the unique SPNE outcome of the game, the CP pays the side-payment to the non-neutral ISP and offers her content with the premium quality. On the other hand, the CP does not offer her content on the neutral ISP. Thus, the neutral ISP would be driven out of the market. We show that in this case, a neutral regime yields a higher end-user welfare than a non-neutral regime.

AB - Net neutrality on the Internet is perceived as the policy that mandates Internet Service Providers (ISPs) to treat all data equally, regardless of the source, destination, and type of the data. In this work, we consider a scheme in which there exist two ISPs, one Content Provider (CP), and a continuum of end-users. One of the ISPs are neutral and the other is non-neutral, i.e. she offers a premium quality to a CP in exchange of a side-payment. In addition, we consider that the CP can differentiate between ISPs by controlling the quality of the content she is offering on each one. We consider a near-perfect competition between ISPs, i.e. a scenario that none of the ISPs has high market power, and formulate the game as a sequential game. We show that there exist a unique SPNE for the game. In the unique SPNE outcome of the game, the CP pays the side-payment to the non-neutral ISP and offers her content with the premium quality. On the other hand, the CP does not offer her content on the neutral ISP. Thus, the neutral ISP would be driven out of the market. We show that in this case, a neutral regime yields a higher end-user welfare than a non-neutral regime.

UR - http://www.scopus.com/inward/record.url?scp=84992396970&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=84992396970&partnerID=8YFLogxK

U2 - 10.1109/CISS.2016.7460555

DO - 10.1109/CISS.2016.7460555

M3 - Conference contribution

AN - SCOPUS:84992396970

T3 - 2016 50th Annual Conference on Information Systems and Sciences, CISS 2016

SP - 511

EP - 516

BT - 2016 50th Annual Conference on Information Systems and Sciences, CISS 2016

PB - Institute of Electrical and Electronics Engineers Inc.

ER -

Lotfi MH, Sarkar S, Kesidis G. Migration to a non-neutral internet: Economics modeling and analysis of impact. In 2016 50th Annual Conference on Information Systems and Sciences, CISS 2016. Institute of Electrical and Electronics Engineers Inc. 2016. p. 511-516. 7460555. (2016 50th Annual Conference on Information Systems and Sciences, CISS 2016). https://doi.org/10.1109/CISS.2016.7460555