Big content providers weighing on non-neutrality?

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There is a trend for big content providers such as Netflix and YouTube to give grades to Internet Service Providers (ISPs), to incentivize those ISPs to improve at least the quality offered to their service. We design in this paper a model analyzing ISPs’ optimal allocation strategies in a competitive context and in front of quality-sensitive users. We show that the optimal strategy is non-neutral, that is, it does not allocate bandwidth proportionally to the traffic share of content providers. On the other hand, we show that non-neutrality does not benefit ISPs but is surprisingly favorable to the perceived quality for users.