  We analyze the effect of sponsored data platforms when Internet service
providers (ISPs) compete for subscribers and content providers (CPs) compete
for a share of the bandwidth usage by the customers. Our analytical model is of
a full information, leader-follower game. ISPs lead and set prices for
sponsorship. CPs then make the binary decision of sponsoring or not sponsoring
their content on the ISPs. Lastly, based on both of these, users make a
two-part decision of choosing the ISP to which they subscribe, and the amount
of data to consume from each of the CPs through the chosen ISP. User
consumption is determined by a utility maximization framework, the sponsorship
decision is determined by a non-cooperative game between the CPs, and the ISPs
set their prices to maximize their profit in response to the prices set by the
competing ISP. We analyze the pricing dynamics of the prices set by the ISPs,
the sponsorship decisions that the CPs make and the market structure therein,
and the surpluses of the ISPs, CPs, and users.
  This is the first analysis of the effect sponsored data platforms in the
presence of ISP competition. We show that inter-ISP competition does not
inhibit ISPs from extracting a significant fraction of the CP surplus.
Moreover, the ISPs often have an incentive to significantly skew the CP
marketplace in favor of the most profitable CP.
