Interconnection and competition among asymmetric networks in the Internet backbone market

Jahn, Eric and Prüfer, Jens ORCID: (2008) Interconnection and competition among asymmetric networks in the Internet backbone market. Information Economics and Policy, 20 (3). pp. 243-256. ISSN 0167-6245

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We examine the interrelation between interconnection and competition in the Internet backbone market. Networks that are asymmetric in size choose among different interconnection regimes and compete for end-users. We show that a direct interconnection regime, peering, softens competition as compared to indirect interconnection since asymmetries become less influential when networks peer. If interconnection fees are paid, the smaller network pays the larger one. Sufficiently symmetric networks enter a Peering agreement while others use an intermediary network for exchanging traffic. This is in line with considerations of a non-US policy maker. In contrast, US policy makers prefer that relatively asymmetric networks peer.

Item Type: Article
Additional Information: Funding Information: We owe thanks to Uwe Walz, Christopher Barnekov, Matthias Blonski, Amrita Ray Chaudhuri, seminar participants in Copenhagen and Frankfurt and participants of the 3rd Conference on Applied Infrastructure Research at DIW/TU Berlin, the 5th ICT Conference at ZEW in Mannheim, the EEA Congress in Amsterdam, the EARIE Conference in Porto, the Verein für Socialpolitik (GEA) Jahrestagung in Bonn and the ZEW Workshop on Internet Policy for helpful comments. We appreciate funding through the Internet economics research network of the German Federal Ministry of Education and Research.
Uncontrolled Keywords: asymmetric networks,endogenous network interconnection,internet backbone,two-way access pricing,economics and econometrics,management, monitoring, policy and law ,/dk/atira/pure/subjectarea/asjc/2000/2002
Faculty \ School: Faculty of Social Sciences > School of Economics
UEA Research Groups: Faculty of Social Sciences > Research Centres > Centre for Competition Policy
Faculty of Social Sciences > Research Groups > Economic Theory
Faculty of Social Sciences > Research Groups > Industrial Economics
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Depositing User: LivePure Connector
Date Deposited: 08 Sep 2022 12:30
Last Modified: 21 Oct 2023 00:42
DOI: 10.1016/j.infoecopol.2008.03.002

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