Differential Pricing, Zero Rating, and Network Neutrality


Vishal Misra


Columbia University
Dept. of Computer Science
New York


Tuesday, 5 March 2019, 11:30 to 12:30


  • AG-66 (Lecture Theatre)


Abstract: The Network Neutrality debate continues to rage around the world. While there is broad agreement that preserving the quality of service of content falls under the purview of Net Neutrality, the role of differential pricing, especially the practice of zero rating remains controversial. Even though some countries (India, Canada) have banned differential pricing, others have either taken no stance or explicitly allow zero rating/differential pricing (ZA, Kenya, U.S.). In this work, we consider zero rating options available between Internet Service Providers (ISPs) and Content Providers (CPs), and identify the conditions under which they agree to offer their services in a zero-rated context. Based on a novel choice model of complementary services that considers consumer surplus, we characterize the market shares and utilities of the providers under various differential pricing decisions. We identify the scenarios where CPs decide to adopt a service under zero rating pressure which creates a prisoner’s dilemma scenario. We find that if zero rating options are permitted and offered, low-value CPs often lose utility, especially when they either cannot afford to adopt it, or they establish it under zero rating pressure; whereas high-value CPs often gain utility. Our findings support the perspective that differential pricing is not consistent with Network Neutrality.

Bio: Vishal Misra is a Professor in the Department of Computer Science at Columbia University, with a joint appointment in the Electrical Engineering Department and also a visiting scientist at Google. He is an ACM and IEEE Fellow and his research emphasis is on mathematical modeling of systems, bridging the gap between practice and analysis. He is also credited with inventing live-microblogging at CricInfo, a company he co-founded while a graduate student at UMass Amherst, predating Twitter by 10 years. He also played an active part in the Net Neutrality regulation process in India, where his definition of Net Neutrality was adopted both by the citizen's movement as well as the regulators. He has been awarded a Distinguished Alumnus Award by IIT Bombay (2019) and a Distinguished Young Alumnus Award by UMass Amherst College of Engineering (2014).