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Competition for Quality of Services under Net Neutrality and Prioritization

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  • Kim Jeong-Yoo

    (Kyung Hee University, Dongdaemun-gu, South Korea)

Abstract

This paper examines the effect of prioritization on competing CPs’ incentives to invest to improve their quality of service (QoS). We show that in the single-homing case, no CP makes a positive amount of investment under net neutrality because the effect of reducing delay is shared by both CPs, while the prioritized CP does not invest to improve QoS in the M/M/1 queuing model in which the effect is shared by the unprioritized CP and both CPs invest for QoS in the bandwidth subdivision model in which the effect is not shared. In the multi-homing case, however, CPs invest for QoS even under net neutrality, because CPs do not virtually compete against each other.

Suggested Citation

  • Kim Jeong-Yoo, 2022. "Competition for Quality of Services under Net Neutrality and Prioritization," Review of Network Economics, De Gruyter, vol. 21(2), pages 51-81, August.
    • Handle: RePEc:bpj:rneart:v:21:y:2022:i:2:p:51-81:n:1
    DOI: 10.1515/rne-2022-0049
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    More about this item

    Keywords

    net neutrality; queuing theory; congestion; quality of service; waiting time;
    All these keywords.

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

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