Skip to main content

Free Content Subsidizing Creativity through Network Design: Zero-Pricing and Net Neutrality

Download Article:
(PDF 84.8 kb)


This paper focuses on the pricing aspect of the “net neutrality” debate—in particular, the de facto ban on fees levied by Internet service providers on content providers to reach users. This “zero-price” rule may prove desirable for several reasons. Using a two-sided market analysis, we suggest that it subsidizes creativity and innovation in new content creation—goals shared by copyright and patent laws. The rule also helps to solve a coordination problem: since Internet service providers do not completely internalize the effects of their own pricing decisions, lack of regulation may lead to even higher fees charged by all. Finally, allowing for such fees runs the risk of creating horizontally differentiated Internet service providers with different libraries of accessible content, thereby foreclosing consumers and leading to Internet fragmentation.

Document Type: Research Article


Publication date: June 1, 2009

More about this publication?
  • The Journal of Economic Perspectives (JEP) attempts to fill a gap between the general interest press and most other academic economics journals. The journal aims to publish articles that will serve several goals: to synthesize and integrate lessons learned from active lines of economic research; to provide economic analysis of public policy issues; to encourage cross-fertilization of ideas among the fields of thinking; to offer readers an accessible source for state-of-the-art economic thinking; to suggest directions for future research; to provide insights and readings for classroom use; and to address issues relating to the economics profession.
  • Editorial Board
  • Information for Authors
  • Subscribe to this Title
  • Membership Information
  • Terms & Conditions
  • e-Publications for AEA Members
  • AEAweb
  • ingentaconnect is not responsible for the content or availability of external websites

Access Key

Free Content
Free content
New Content
New content
Open Access Content
Open access content
Subscribed Content
Subscribed content
Free Trial Content
Free trial content
Cookie Policy
Cookie Policy
ingentaconnect website makes use of cookies so as to keep track of data that you have filled in. I am Happy with this Find out more
Real Time Web Analytics