Subsidizing Creativity through Network Design: Zero-Pricing and Net Neutrality

  • Robin S Lee
    Stern School of Business, New York University, New York City, New York. At the time this paper was written, he was Research Scientist, Yahoo! Research (Microeconomics), New York City, New York.
  • Tim Wu
    Columbia University Law School, New York City, New York, and a Fellow at the New America Foundation, Washington, D.C.

説明

<jats:p> This paper focuses on the pricing aspect of the “net neutrality” debate—in particular, the de facto ban on fees levied by Internet service providers on content providers to reach users. This “zero-price” rule may prove desirable for several reasons. Using a two-sided market analysis, we suggest that it subsidizes creativity and innovation in new content creation—goals shared by copyright and patent laws. The rule also helps to solve a coordination problem: since Internet service providers do not completely internalize the effects of their own pricing decisions, lack of regulation may lead to even higher fees charged by all. Finally, allowing for such fees runs the risk of creating horizontally differentiated Internet service providers with different libraries of accessible content, thereby foreclosing consumers and leading to Internet fragmentation. </jats:p>

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