An analysis of network neutrality regulation with reference to price discrimination

Abstract

Traditionally, the internet platform has always been viewed as a one-sided network, imposing neutral network pricing between the subscribers and the content providers. This paper aims at analysing a situation that deviates from net neutrality and thereby studying the competitive outcomes when price discrimination is followed. The characteristics of internet platform as a two-sided market are initially reviewed followed by the analysis of the existing pricing mechanism of the internet service providers. The analysis throws light on the benefits accrued by the stakeholders, namely internet service provider, application provider and subscriber. With this understanding of the internet platform, the current issues of regulating net neutrality and ways of introducing price discrimination are briefly discussed. Building on seminal literature works, the central tenet of the article focuses on introducing a price discriminatory mechanism in a duopoly market condition that increases the overall stakeholders' value.