TheDebateonNetNeutralityA.PDF

The Debate on Net Neutrality: A Policy Perspective * Hsing Kenneth Cheng Subhajyoti Bandyopadhyay and Hong Guo Department of Decision and Information Sciences Warrington College of Business Administration University of Florida Gainesville, FL 32611-7169 U.S.A. * Corresponding author. Phone: (352)392-7068; Fax: (352) 392-5438 e-mail:; e-mail: hkcheng@ This research was made possible through a grant from the Public Utility Research Center in the Warrington College of Business Administration of the University of Florida The Debate on Net Neutrality: A Policy Perspective Abstract Whether to legislate to maintain “net neutrality”, the current status quo of prohibiting broadband service providers from charging online websites for preferential access to their residential and commercial customers, has become a subject under fierce debate. We develop a stylized game-theoretic model to address two critical issues of the net neutrality: (1) who are gainers and losers of abandoning net neutrality, and (2) will broadband service providers have greater incentive to expand their capacity without net neutrality. We find that if the principle of net neutrality is abandoned, the broadband service provider definitely stands to gain from the arrange