Keeping the network neutral: Game theory analysis on Internet service provider discrimination against application service providers

To address network neutrality problems, we introduce an economic model. The model shows that when Internet service providers (ISPs) disregard the network neutrality principle, the market experiences deadweight loss and social welfare is decreased. These results translate to market failure, which can be prevented by government regulation of quality discrimination and the introduction of price discrimination. However, even with government regulation, ISPs can still force the rise of their fees such that network neutrality is disregarded. Accordingly, we show that the network neutrality problem can be solved by regulating fees to relatively increase along with the delay costs.