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Effects of Eliminating Net Neutrality on Internet Service and Content Providers

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Today, we are experiencing a world where Net Neutrality exists in most of the countries around the world except a handful. Who knows if this will be the case in 10 years? An economy shifting from net neutrality to non-net neutrality could have an effect of wiping out an entire…

Today, we are experiencing a world where Net Neutrality exists in most of the countries around the world except a handful. Who knows if this will be the case in 10 years? An economy shifting from net neutrality to non-net neutrality could have an effect of wiping out an entire industry of start-ups and innovation. The main stakeholders in this industry are the Internet Service Providers (ISPs), who provide services to access, use and participate in the Internet such as AT\&T, Verizon and T-Mobile. The other main stakeholders are the Content Providers (CPs), who provide information or content to the end users through websites such as Netflix, Google, Wikipedia, etc. Before diving into the effects it has on the economy, let's discuss a little about what net neutrality and non-net neutrality really means and their pricing strategies. Typically in an economy where net neutrality exists, the ISPs charge a fixed price to the CPs and the end-users. The ISPs tend to compete on price in order to attract the CPs to use their service for content due to tight competition among the ISPs to capture profits. Thus, these costs to the CPs would be minimal, encouraging individuals from all over the world to innovate and provide content to the end users. The price burden in this case would fall not on the CPs but on the end users. But, ISPs may not be able to over charge the end users either, as they would lose their demand due to competition from other ISPs. Therefore, in spite of being the bearers of heavy investment costs to improve network quality, the ISPs haven't been enjoying profits for a long time. Meanwhile, the CPs are gaining large profits with minimal investment costs thanks to their market power over the ISPs.
ContributorsKosaraju, Sreya (Author) / Bertran, Fernando Leiva (Thesis director) / Mendez, Jose (Committee member) / Department of Information Systems (Contributor) / Department of Economics (Contributor) / Barrett, The Honors College (Contributor)
Created2019-05