Journal of Regulatory Economics

, Volume 50, Issue 1, pp 99–110 | Cite as

Weak versus strong net neutrality: correction and clarification

  • Joshua S. GansEmail author
  • Michael L. Katz
Original Article


We correct and clarify the results of Gans (J Regul Econ 47:183–200, 2015) regarding the effects of net neutrality regulation on equilibrium outcomes in settings where a content provider sells its services to consumers for a fee. We examine both pricing and investment effects. We extend the earlier paper’s result that weak forms of net neutrality are ineffective and also show that even a strong form of net neutrality may be ineffective. In addition, we demonstrate that, when strong net neutrality does affect the equilibrium outcome, it may harm efficiency by distorting both ISP and content provider investment and service-quality choices.


Regulation Net neutrality Internet service providers Content providers Infrastructure investment 

JEL Classification

L1 D4 L12 L13 C63 D42 D43 


  1. Federal Communications Commission. (2015, March 12). In the Matter of Protecting and Promoting the Open Internet, Report and Order on Remand, Declaratory Ruling, and Order, rel.Google Scholar
  2. Gans, J. S. (2015). Weak versus strong net neutrality. Journal of Regulatory Economics, 47, 183–200.CrossRefGoogle Scholar
  3. Gans, J. S. & King, S. P. (2003). The neutrality of interchange fees in payment systems. Topics in Economic Analysis and Policy. doi: 10.2202/1538-0653.1069.
  4. Greenstein, S., Peitz, M. & Valletti, T. (2016). Net neutrality: A fast lane to understanding the trade-offs. Working Paper No.21950, NBER.Google Scholar
  5. Hermalin, B. E., & Katz, M. L. (2007). The economics of product-line restrictions with an application to the network neutrality debate. Information Economics and Policy, 19, 215–248.CrossRefGoogle Scholar
  6. Katz, M. L. (2016). (forthcoming) Wither the open internet order? Review of Industrial Organization. Google Scholar
  7. Spence, A. M. (1975). Monopoly, quality, and regulation. Bell Journal of Economics, 2, 417–429.CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media New York 2016

Authors and Affiliations

  1. 1.Rotman School of ManagementUniversity of TorontoTorontoCanada
  2. 2.NBERCambridgeUSA
  3. 3.Haas School of BusinessBerkeleyUSA

Personalised recommendations