This paper studies the investment decision by a monopolistic internet service provider (ISP) in different regulatory environments. We consider that the ISP can technically provide separate quality upgrades to two vertically differentiated content providers (CPs). Our results show that if unregulated, the ISP could optimally provide asymmetric quality upgrades to both CPs, in favor of the high-quality CP. This subsequently increases the degree of content differentiation, softening competition between the CPs. Imposing a nondiscrimination regulation that forces the ISP to provide an equal quality upgrade to both CPs, however, reduce the ISP’s investment incentive and social welfare. Furthermore, the social planner provides preferential treatment to the high-quality CP if the degree of substitutability is sufficiently low. In contrast, it is socially optimal to prioritize the low-quality CP if the contents are sufficient substitutes, or provide exclusivity if vertical differentiation is high.

本文研究了垄断互联网服务提供商（ISP）在不同监管环境下的投资决策。我们认为ISP在技术上可以为两个垂直差异化的内容提供商（CP）提供单独的质量升级。我们的结果表明，如果不受监管，ISP 可以最佳地为两个 CP 提供不对称质量升级，有利于高质量 CP。这随后增加了内容差异化程度，软化了CP之间的竞争。然而，强制 ISP 向两个 CP 提供同等质量的升级的非歧视性规定会降低 ISP 的投资激励和社会福利。此外，如果可替代程度足够低，社会规划者就会对优质CP提供优惠待遇。相比之下，如果内容有足够的替代品，优先考虑低质量的CP，或者如果垂直差异化较高，则提供排他性，这对社会来说是最优的。