Zero-rating and network effects

Research output: Contribution to journalArticle

2 Citations (Scopus)

Abstract

We consider internet service providers’ incentives to zero-rate, i.e. to not count the usage of certain services towards data allowances, in the absence of payments from content providers. We show that zero-rating is adopted if and only if it strongly increases subscriptions. For this it is necessary that participation (as opposed to usage) network effects are strong enough and if zero-rating offers raise expectations about other subscribers’ usage. Zero-rating then also maximizes total welfare.

Original languageEnglish
Article number108813
JournalEconomics Letters
Volume186
DOIs
Publication statusPublished - 1 Jan 2020

Keywords

  • Net neutrality
  • Network effects
  • Zero-rating

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