[ARTICLE] This paper models the interactions between an internet service provider and content providers regarding network size and congestion, analyzing how regulatory frameworks like Net Neutrality, Laissez-Faire, and Price Regulation impact economic efficiency and environmental performance.

by Wilfried Sand-Zantman (ESSEC Business School), Jean-Christophe Poudou

We address the need to regulate Internet infrastructure usage to take into account environmental externalities. We model the interactions between an internet service provider and some content providers in settings where the former chooses the network size and the latter influence congestion on the network. We then discuss how different regulatory frameworks (Net Neutrality, Laissez-Faire, Price Regulation) impact both the economic efficiency and the environmental performance. In particular, we highlight that inducing more efficiency effort from the content providers may either improve or worsen the final environmental outcome, and provide some conditions for one case or the other to prevail.

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