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Preventing competition using side payments: when non-neutrality creates barriers to entry

Author

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  • Patrick Maillé

    (Telecom Bretagne)

  • Bruno Tuffin

    (Campus Universitaire de Beaulieu)

Abstract

Network neutrality is often advocated by content providers, stressing that side payments to Internet Service Providers would hinder innovation. However, we also observe some content providers actually paying those fees. This paper intends to explain such behaviors through economic modeling, illustrating how side payments can be a way for an incumbent content provider to prevent new competitors from entering the market. We investigate the conditions under which the incumbent can benefit from such a barrier-to-entry, and the consequences of that strategic behavior on the other actors: content providers, users, and the Internet Service Provider. We also describe how the Nash bargaining solution concept can be used to determine the side payment.

Suggested Citation

  • Patrick Maillé & Bruno Tuffin, 2017. "Preventing competition using side payments: when non-neutrality creates barriers to entry," Netnomics, Springer, vol. 18(1), pages 3-22, May.
    • Handle: RePEc:kap:netnom:v:18:y:2017:i:1:d:10.1007_s11066-016-9110-6
    DOI: 10.1007/s11066-016-9110-6
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    References listed on IDEAS

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    Cited by:

    1. Xinyi Hu & George Kesidis & Behdad Heidarpour & Zbigniew Dziong, 2020. "Media delivery competition with edge cloud, remote cloud and networking," Netnomics, Springer, vol. 21(1), pages 17-36, December.

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