A Study of Non-Neutral Networks with Usage-based Prices

Abstract: Hahn and Wallsten wrote that network neutrality "usually means that broadband service providers charge consumers only once for Internet access, do not favor one content provider over another, and do not charge content providers for sending information over broadband lines to end users." In this paper we study the implications of non-neutral behaviors under a simple model of linear demand-response to usage-based prices. We take into account advertising revenues and consider both cooperative and non-cooperative scenarios. In particular, we model the impact of side-payments between service and content providers. We also consider the effect of service discrimination by access providers, as well as an extension of our model to non-monopolistic content providers.