Abstract
Zero-rating is a recent practice that allows internet providers to discriminate among contents. Focusing on the consumer side, we show that a monopolist provider may implement zero-rating in order to extract more surplus from consumers who have heterogeneous tastes for content. This is akin to the practice of quantity discounts with one difference: the monopolist screens consumer types by distorting not only the total consumption, but also the composition of consumption. Zero-rating may lead to an increase in network capacity and improve welfare.
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