Internet users have suffered collateral damage in tussles over paid peering between large ISPs and large content providers. Paid peering is a relationship where two networks exchange traffic with payment, which provides direct access to each other’s customers without having to pay a third party to carry that traffic for them. The issue will arise again when the United States Federal Communications Commission (FCC) considers a new net neutrality order.

We first consider the effect of paid peering on broadband prices. We adopt a two-sided market model in which an ISP maximizes profit by setting broadband prices and a paid peering price. We analytically derive the profit-maximizing prices, and show that they satisfy a generalization of the well-known Lerner rule. Our result shows that paid peering fees reduce the premium plan price, increase the video streaming price and the total price for premium tier customers who subscribe to video streaming services; however, the ISP passes on to its customers only a portion of the revenue from paid peering. ISP profit increases but video streaming profit decreases as an ISP moves from settlement-free peering to paid peering price.

We next consider the effect of paid peering on consumer surplus. We find that consumer surplus is a uni-modal function of the paid peering fee. The paid peering fee that maximizes consumer surplus depends on elasticities of demand for broadband and for video streaming. However, consumer surplus is maximized when paid peering fees are significantly lower than those that maximize ISP profit. However, it does not follow that settlement-free peering is always the policy that maximizes consumer surplus. The peering price depends critically on the incremental ISP cost per video streaming subscriber; at different costs, it can be negative, zero, or positive.

互联网用户在大型 ISP 和大型内容提供商之间的付费对等争斗中遭受了附带损害。付费对等是两个网络通过支付交换流量的关系，它提供了对彼此客户的直接访问，而无需支付第三方来为他们传输该流量。当美国联邦通信委员会 (FCC) 考虑新的网络中立命令时，该问题将再次出现。

我们首先考虑付费对等互连对宽带价格的影响。我们采用双向市场模式，其中 ISP 通过设置宽带价格和付费对等价格来最大化利润。我们分析推导出利润最大化价格，并证明它们满足著名的勒纳规则的推广。我们的结果表明，支付对等互连费用降低了高级计划价格，提高了视频流价格和订阅视频流服务的高级客户的总价格；但是，ISP 仅将付费对等互连的部分收入转给其客户。随着 ISP 从无结算对等转向付费对等价格，ISP 利润增加，但视频流利润减少。

我们接下来考虑付费对等对消费者剩余的影响。我们发现消费者剩余是付费对等费用的单模函数。最大化消费者剩余的付费对等连接费用取决于宽带和视频流的需求弹性。然而，当支付的对等费用明显低于使 ISP 利润最大化的费用时，消费者剩余最大化。然而，这并不意味着无结算对等始终是最大化消费者剩余的政策。对等互连价格主要取决于每个视频流用户的增量 ISP 成本；在不同的成本下，它可以是负数、零或正数。