Research Article


DOI :10.26650/ISTJECON2022-1113428   IUP :10.26650/ISTJECON2022-1113428    Full Text (PDF)

Net Neutrality in the Content Provision and Internet Service Provision Markets

Turgut ErkulSencer Ecer

Relaxing net neutrality in the form of introducing termination fees and its welfare effects are considered in a model of imperfect complements. The equilibrium of the game between the internet service provider (ISP) and the content provider (CP) yields welfare-maximizing termination fees that depend on the relative size of the ISP’s and the CP’s own-price effects and the cross-price effects. Only when the ISP’s own price effect is relatively high compared to that of the CP’s, along with high cross price effects, such a fee should be allowed. On the other hand, when the CP’s own price effect is relatively high compared to that of the ISP’s, along with high cross price effects, mergers are expected and are likely not harmful to social welfare. Telecommunication regulators may find the results useful in their net neutrality decisions.

JEL Classification : L13 , L51 , L86
DOI :10.26650/ISTJECON2022-1113428   IUP :10.26650/ISTJECON2022-1113428    Full Text (PDF)

İçerik Sağlayıcı ve İnternet Servis Sağlayıcı Pazarında Ağ Tarafsızlığı

Turgut ErkulSencer Ecer

İnternet servis sağlayıcı ve içerik sağlayıcı arasındaki eksik tamamlayıcılık ilişkisini modelleyerek ağ tarafsızlığının uygulanması ve uygulanmaması gereken ekonomik şartları belirledik. Oyun teorisi yöntemleri ile bulduğumuz dengede, sosyal faydayı maksimize eden erişim ücretinin, model parametreleri olan fiyat etkileri ve çapraz fiyat etkilerine bağlı olduğunu ortaya çıkardık. Sadece servis sağlayıcının kendi fiyat etkisinin içerik sağlayıcınınkinden büyük ve çapraz fiyat etkisinin görece yüksek olduğu durumlarda, ağ tarafsızlığının gevşetilip, erişim ücretine izin verilmesi gerektiği sonucunu bulduk. Eğer içerik sağlayıcının kendi fiyat etkisi servis sağlayıcınınkinden büyükse ve çapraz fiyat etkisi görece yüksekse, bu durumda şirket birleşmelerinin gerçekleşeceğini ve sosyal faydaya zarar vermeyeceğini model çözümünden öngördük. Bulduğumuz sonuçlara dayanarak telekomünikasyon regülasyon kurumları ülkelerindeki internet servis sağlayıcı ve içerik sağlayıcıya ait kendi fiyat etkisi ve çapraz fiyat etkisi bilgilerini kullanarak ağ tarafsızlığı konularında alacakları kararlarını değerlendirebilirler.

JEL Classification : L13 , L51 , L86

PDF View

References

  • Bourreau, M., & Lestage, R. (2019). Net neutrality and asymmetric platform competition. Journal of Regulatory Economics, 55(2), 140-171. google scholar
  • Calzada, J., & Tselekounis, M. (2018). Net Neutrality in a hyperlinked Internet economy. International Journal of Industrial Organization, 59, 190-221. google scholar
  • Clark, D. D. (2007). [Special Section on Net Neutrality] Network Neutrality: Words of Power and 800-Pound Gorillas. International Journal of Communication, 1(1), 8. google scholar
  • Comcast Cable Communications, LLC. (2022). Annual report 2021. Retrieved from https://www. cmcsa.com/static-files/8887f574-dfa9-4480-8c8b-ed7771f7ce44 google scholar
  • CompaniesMarketCap.com. (2022). Market capitalization of Netflix (NFLX). Market cap history of Netflix from 2002 to 2022. Retrieved from https://companiesmarketcap.com/netflix/marketcap/ google scholar
  • Denning, Stephanie. (2019). Why debt isn’t killing Netflix any time soon. Retrieved from https:// www.forbes.com/sites/stephaniedenning/201 9/05/26/why-debt-isnt-killing-netflix/?sh=3d07c08b5407 google scholar
  • Economides, N. (2015). Economic features of the internet and network neutrality. In Y. Bramoulle, A. Galeotti, & B. W. Rogers (Eds), The Oxford handbook of the economics of networks (pp. 810-822), Oxford Handbooks. google scholar
  • Economides, N., & Hermalin, B. E. (2012). The economics of network neutrality. The RAND Journal of Economics, 43(4), 602-629. google scholar
  • Gans, J. S. (2015). Weak versus strong net neutrality. Journal of Regulatory Economics, 47(2), 183-200. google scholar
  • Greenstein, S., Peitz, M., & Valletti, T. (2016). Net neutrality: A fast lane to understanding the trade-offs. Journal of Economic Perspectives, 30(2), 127-50. google scholar
  • Kastrenakes, Jacob. (2022). Netflix raises prices on all plans in US. Retrieved from https://www. theverge.com/2022/1/14/22884263/netflix-price-increases-2021-us-canada-all-plans-hd-4k google scholar
  • Katsoulacos, Y., Metsiou, E., & Ulph, D. (2016). Optimal substantive standards for competition authorities. Journal of Industry, Competition and Trade, 16(3), 273-295. google scholar
  • Kirkwood, J. B., & Lande, R. H. (2008). The fundamental goal of antitrust: Protecting consumers, not increasing efficiency. Notre Dame Law Review, 84, 191. google scholar
  • Leiner, B. M., Cerf, V. G., Clark, D. D., Kahn, R. E., Kleinrock, L., Lynch, D. C., ... & Wolff, S. (2009). A brief history of the Internet. ACM SIGCOMM Computer Communication Review, 39(5), 22-31. google scholar
  • Li, S., Xu, J., Van Der Schaar, M., & Li, w. (2016). Popularity-driven content caching. In IEEE INFOCOM 2016-The 35th Annual IEEE International Conference on Computer Communications (pp. 1-9). google scholar
  • Kramer, J., Wiewiorra, L., & Weinhardt, C. (2013). Net neutrality: A progress report. Telecommunications Policy, 37(9), 794-813. google scholar
  • Mas-Colell, A., Whinston, M. D., & Green, J. R. (1995). Microeconomic theory (Vol. 1). New York: Oxford university press. google scholar
  • Macrotrends, LLC. (2022). Netflix net profit margin 2010-2021 | NFLX. Retrieved from https://www. macrotrends.net/stocks/charts/NFLX/netflix/net-profit-margin google scholar
  • Mitra, D., & Sridhar, A. (2018). The case for formation of ISP-Content providers consortiums by Nash bargaining for internet content delivery. arXiv preprint arXiv:1810.10660. google scholar
  • Netflix, Inc. (2022). Annual report 2021. Retrieved from https://s22.q4cdn.com/959853165/files/ doc_financials/2021/q4/da27d24b-9358-4b5c-a424-6da061d91836.pdf google scholar
  • Njoroge, P., Ozdaglar, A., Stier-Moses, N. E., & Weintraub, G. Y. (2014). Investment in two-sided markets and the net neutrality debate. Review of Network Economics, 12(4), 355-402. google scholar
  • Norton, W. B. (2001). Internet service providers and peering. In Proceedings of NANOG (Vol. 19, pp. 1-17). google scholar
  • Russell, K. (2014). Netflix CEO blasts Comcast over net neutrality. Retrieved from https://www. businessinsider.com/netflix-ceo-reed-hastings-blasts-comcast-2014-3 google scholar
  • Singh, N., & Vives, X. (1984). Price and quantity competition in a differentiated duopoly. The Rand Journal of Economics, 546-554. google scholar
  • Statista, GmbH. (2022). Number of fixed broadband subscriptions in the United States from 2000 to 2020. Retrieved from https://www.statista.com/statistics/183614/us-households-with-broadband-internet-access-since-2009/ google scholar
  • The World Bank. (2022). Inflation, consumer prices (annual %) - United States. Retrieved from https://data.worldbank.org/indicator/FP.CPI.TOTL.ZG?locations=US google scholar
  • Wright, J. (1999). Competition and termination in cellular networks. Available at SSRN 201988. google scholar
  • Wu, T. (2003). Network neutrality, broadband discrimination. Journal on Telecomm. & High Tech. L., 2, 141. google scholar

Citations

Copy and paste a formatted citation or use one of the options to export in your chosen format


EXPORT



APA

Erkul, T., & Ecer, S. (2022). Net Neutrality in the Content Provision and Internet Service Provision Markets. Istanbul Journal of Economics, 72(2), 689-724. https://doi.org/10.26650/ISTJECON2022-1113428


AMA

Erkul T, Ecer S. Net Neutrality in the Content Provision and Internet Service Provision Markets. Istanbul Journal of Economics. 2022;72(2):689-724. https://doi.org/10.26650/ISTJECON2022-1113428


ABNT

Erkul, T.; Ecer, S. Net Neutrality in the Content Provision and Internet Service Provision Markets. Istanbul Journal of Economics, [Publisher Location], v. 72, n. 2, p. 689-724, 2022.


Chicago: Author-Date Style

Erkul, Turgut, and Sencer Ecer. 2022. “Net Neutrality in the Content Provision and Internet Service Provision Markets.” Istanbul Journal of Economics 72, no. 2: 689-724. https://doi.org/10.26650/ISTJECON2022-1113428


Chicago: Humanities Style

Erkul, Turgut, and Sencer Ecer. Net Neutrality in the Content Provision and Internet Service Provision Markets.” Istanbul Journal of Economics 72, no. 2 (Jul. 2024): 689-724. https://doi.org/10.26650/ISTJECON2022-1113428


Harvard: Australian Style

Erkul, T & Ecer, S 2022, 'Net Neutrality in the Content Provision and Internet Service Provision Markets', Istanbul Journal of Economics, vol. 72, no. 2, pp. 689-724, viewed 24 Jul. 2024, https://doi.org/10.26650/ISTJECON2022-1113428


Harvard: Author-Date Style

Erkul, T. and Ecer, S. (2022) ‘Net Neutrality in the Content Provision and Internet Service Provision Markets’, Istanbul Journal of Economics, 72(2), pp. 689-724. https://doi.org/10.26650/ISTJECON2022-1113428 (24 Jul. 2024).


MLA

Erkul, Turgut, and Sencer Ecer. Net Neutrality in the Content Provision and Internet Service Provision Markets.” Istanbul Journal of Economics, vol. 72, no. 2, 2022, pp. 689-724. [Database Container], https://doi.org/10.26650/ISTJECON2022-1113428


Vancouver

Erkul T, Ecer S. Net Neutrality in the Content Provision and Internet Service Provision Markets. Istanbul Journal of Economics [Internet]. 24 Jul. 2024 [cited 24 Jul. 2024];72(2):689-724. Available from: https://doi.org/10.26650/ISTJECON2022-1113428 doi: 10.26650/ISTJECON2022-1113428


ISNAD

Erkul, Turgut - Ecer, Sencer. Net Neutrality in the Content Provision and Internet Service Provision Markets”. Istanbul Journal of Economics 72/2 (Jul. 2024): 689-724. https://doi.org/10.26650/ISTJECON2022-1113428



TIMELINE


Submitted10.05.2022
Accepted30.06.2022
Published Online19.09.2022

LICENCE


Attribution-NonCommercial (CC BY-NC)

This license lets others remix, tweak, and build upon your work non-commercially, and although their new works must also acknowledge you and be non-commercial, they don’t have to license their derivative works on the same terms.


SHARE




Istanbul University Press aims to contribute to the dissemination of ever growing scientific knowledge through publication of high quality scientific journals and books in accordance with the international publishing standards and ethics. Istanbul University Press follows an open access, non-commercial, scholarly publishing.