Journal of Information Technology Services (한국IT서비스학회지)

Korea Society of IT Services (한국IT서비스학회)
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Network Neutrality in the Digital Convergence Era : a System Dynamics Model with Two-Sided Market Framework

디지털 컨버전스 환경에서 양면시장 플랫폼으로서의 인터넷망 중립성에 관한 동태적 분석

  • Received : 2011.04.25
  • Accepted : 2011.06.14
  • Published : 2011.06.30
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Abstract

The industrial ecosystem around the Internet services has been evolving since the Internet was first introduced. The Net Neutrality issue best represents the process of the evolution and presents an inevitable challenge that the industry should overcome. This paper deals with this structural change with the Two-Sided Market framework and provides a System Dynamics(SD) model to evaluate the economic implications of the net neutrality policy. In particular, our approach analyzes the policy impacts when two competing platforms (network providers) play a role of the platform in a typical two-sided market, which connects Content Providers(CPs) with users. Previous studies show that the indirect network externality between these two markets makes the entire system tip to one platform. When the multi-homing in the CP market is allowed as in our model, however, their argument may lose its validity. To examine the system behavior, conducted here is SD simulations of our model. The simulation results show that co-existence of the competing platforms persists with the network effects over a certain threshold. The net neutrality policy seems to lower the threshold based on our experimental outcomes.

Keywords

Acknowledgement

Supported by : 경희대학교

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