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When ‘Just’ is Just Not Enough

Why Consumers Do Not Appreciate Non-Neutral Internet Access Services

Abstract

Although Internet service providers (ISPs) are technically capable as well as legally allowed to offer non-neutral Internet access services, where the data flows of customers who pay a premium are prioritized over others, such an access service is currently not offered by ISPs. We argue that ISPs are hesitant to tap the price discrimination potential of prioritized Internet access services, because in the context of the ongoing public debate on net neutrality (NN), their customers would consider such differentiation unjust. In a representative survey among German Internet access customers, we find that the customers’ perceptions of justice as well as the framing of the mechanism by which prioritized Internet access is provided are indeed decisive for whether customers would prefer this access regime over NN. In particular, we find that perceptions of distributive and procedural justice influence customers’ choice for non-neutral Internet access. Moreover, customers are more likely to accept a regime that offers an absolute rather than a relative prioritization of data flows.

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Notes

  1. On February 26, 2015, the United States regulatory body ruled in favor of net neutrality by reclassifying broadband access as a telecommunications service. However, the new regulatory regime is concerned with the relationship between Internet service providers and content providers (B2B) and therefore makes it even more likely that ISPs now shift their focus on non-neutral Internet access to consumers (B2C).

  2. Note that non-neutral Internet access is not to be confused with the data rate of an Internet access. The data rate [measured in megabit per second (Mbps)] states the maximum rate at which data packets can be sent through the network without congestion. When the network is congested, however, delays occur independent of the data rate.

  3. Nevertheless, in order to control for a potential halo-effect of current satisfaction with the ISP or the lack thereof, we incorporated control measures in our survey (see Sect. 2.3).

  4. Details of the elicitation of these controls are provided in Sect. 3.2.

  5. Since we cannot assume that the different dimensions of justice are orthogonal to each other, Hendrickson and White (1964) suggest choosing the promax oblique rotation method, which then leads to more accurate results.

  6. Parallel analysis is widely accepted to be one of the most accurate factor extraction methods (Hayton et al. 2004). In particular, it outperforms the Guttmann-Kaiser eigenvalue greater than one rule (Glorfeld 1995).

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Acknowledgments

The authors wish to thank participants of the Telecommunications Policy Research Conference 2012, as well as participants of the Workshop on Information Systems and Economics 2012 for valuable comments. Financial support through the Deutsche Forschungsgemeinschaft via Graduate School GRK 895 is gratefully acknowledged.

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Correspondence to Lukas Wiewiorra.

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Accepted after two revisions by the editors of the special focus.

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Krämer, J., Wiewiorra, L. When ‘Just’ is Just Not Enough. Bus Inf Syst Eng 57, 325–338 (2015). https://doi.org/10.1007/s12599-015-0398-9

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Keywords

  • Internet access service
  • Net neutrality
  • Quality of service
  • Congestion
  • Pricing
  • Justice
  • Fairness