Mikhail M. Taipov The consequences of Net Neutrality

DOI: 10.38050/2078-3809-2024-16-4-48-69

Abstract

Net Neutrality has a great impact on the functioning of the market of Internet service providers (ISPs) and social welfare. In this paper, in order to draw conclusions about the consequences of Net Neutrality, an analysis of articles exploring various aspects of Net Neutrality was carried out. It was concluded that the zero-price rule stimulates the emergence of new content, but reduces consumer surplus, affects the investments of ISPs and content providers and can both increase and decrease the total social welfare. A ban on degrading the quality of competitors' content is required only in cases where these Internet services are of great value to consumers and the ISPs’ own services can serve as a high-quality substitute for them. Net Neutrality reduces the likelihood of Internet fragmentation, which can weaken competition between ISPs and positively or negatively affect their investments. It was found that competition between ISPs makes it unnecessary to ban the sale of premium quality content deliverу, but does not eliminate the need for other prohibitions imposed by Net Neutrality.

Keywords: Net Neutrality, two-sided markets, platforms, social welfare, zero-price rule.

JEL: D21, D40, D62.

For citation: Taipov, M.M. (2024) The consequences of Net Neutrality. Scientific Research of Faculty of Economics. Electronic Journal, vol. 16, no. 4, pp. 48-69. DOI: 10.38050/2078-3809-2024-16-4-48-69.

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