Network Non-Neutrality on the Internet: Content Provision Under a Subscription Revenue Model

Abstract: The goal of this paper is to provide an insight into the equilibrium of the Internet market, when the current balance of the market is disrupted, and one of the ISPs switches to a non-neutral regime. We consider a content provider with a subscription revenue model and a continuum of end-users. The CP is also non-neutral, in the sense that she can charge users of different ISPs different subscription fees, and use this "leverage" to control the equilibrium outcome. Results reveal that the CP is able to control the non-neutral ISP to some extend. However, switching to a non-neutral regime by an ISP tips the balance of the market in favor of this ISP.