Chapter 3Network Neutrality with Content Caching and Its Effect on Access Pricing*

FATIH KOCAK, GEORGE KESIDIS, and SERGE FDIDA

3.1 Introduction

The continuing network (net) neutrality debate (e.g., [1–3], 26) involves several different entities, such as Internet service providers (ISPs),1 content providers (CPs), users, and governments (including partnerships). Although there are many different perceptions for the definition and the coverage of net neutrality, one succinct definition is provided in [4]: “[net neutrality] usually means broadband service providers charge consumers only once for Internet access, do not favor one CP over another, and do not charge CPs for sending information over broadband lines to end users.”

CPs, such as Amazon, Google, Yahoo!, and eBay, typically support net neutrality because under nonneutral conditions, they expect additional access-networking expenses and additional limitations or exclusions on their access to their customers [5]. In contrast to CPs, ISPs (particularly residential ISPs) such as AT&T, Verizon, Comcast, and Deutsche Telekom typically believe that neutrality regulations threaten the profitability of their enormous infrastructure investments and maintenance costs [1, 5] and that CPs do not pay a fair share of these costs while profiting from advertising that is arguably not requested by consumers.2 Also, flat-rate pricing frameworks leading to “all-you-can-eat” consumer behavior result in high transport costs and congestion ...

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