Modelling the Welfare Effects of Network Neutrality Regulation: A Response to Caves’s Comment

In this comment we address a reply to our paper Economides and Tåg (2012) by Caves (2012). Based on data on content providers’ and ISPs’ profits in an oligopolistic market in the US, Caves attempts to draw conclusions on whether the parameter ranges in our model identified as generating a surplus enhancement from network neutrality are reasonable. While we believe that taking a theoretical model to data is generally a good idea if it done right, this comment urges caution in drawing policy conclusions based on this effort.