STATISTICAL FRAMEWORK TO VALUE NETWORK NEUTRALITY 24 STATISTICAL FRAMEWORK TO VALUE NETWORK NEUTRALITY by

than a non-neutral network that biases network traffic in a fashion that is unfavorable to end users. The contribution of this paper is linking the total value of network infrastructure based on the degree of its neutrality to market uncertainty. Rapidly changing Internet technology has created a very uncertain market (market uncertainty is defined below) in the context of providers being able to predict what services users desire and how these users will value services and content, which makes it unlikely that any single service or content provider is the best match for every user. This probabilistic network neutrality model predicts that in today’s uncertain market, the expected value of a non-neutral network is only average and that there would be more users willing to pay more if they had greater choice. The model provides evidence that non-neutral networks are not a necessary prerequisite to the promotion of network infrastructure investment, but in fact, will ultimately stifle the creation of a rich competitive eco-system consisting of both infrastructure and downstream service/content providers.