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IP-based NGNs and Interconnection: The Debate in Europe

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  • J. Scott MARCUS

    (WIK-Consult GmbH, Bad Honnef, Germany)

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    Abstract

    Historically, interconnection in the world of the Internet has been approached significantly differently from interconnection in the fixed Public Switched Telephone Network (PSTN) and the mobile Public Land Mobile Network (PLMN). As fixed and mobile networks evolve to Next Generation Networks (NGNs) based on the Internet Protocol (IP), it becomes increasingly necessary to merge these perspectives in order to achieve a unified and integrated approach to network interconnection. There is a rich history of economic analysis of IP-based and of conventional switched networks that began to converge early in this decade. In 2008, this issue is coming to a boil, as regulators seek to provide regulatory certainty for the build-out of NGNs, even in the face of substantial uncertainties, and even though practical experience with NGNs is still in a very preliminary state. What can we learn from the historical evolution of the theory of interconnection for Internet, NGN, PSTN and PLMN? What issues are "in play" today? What is the appropriate destination in the long term? What nearer term measures are appropriate?

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    Bibliographic Info

    Article provided by IDATE, Com&Strat dept. in its journal Communications & Strategies.

    Volume (Year): 1 (2008)
    Issue (Month): 72 (4th quarter)
    Pages: 17-32

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    Handle: RePEc:idt:journl:cs7201

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    Keywords: interconnection; NGN; Internet Protocol (IP); bill and keep; Calling Party's Network Pays (CPNP); peering; transit.;

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    1. Crémer, Jacques & Rey, Patrick & Tirole, Jean, 1999. "Connectivity in the Commercial Internet," IDEI Working Papers 87, Institut d'Économie Industrielle (IDEI), Toulouse, revised 2000.
    2. Christos Genakos & Tommaso Valletti, 2008. "Testing the “Waterbed” Effect in Mobile Telephony," CEIS Research Paper 110, Tor Vergata University, CEIS, revised 11 Jul 2008.
    3. Laffont, Jean-Jacques & Marcus, Scott & Rey, Patrick & Tirole, Jean, 2003. " Internet Interconnection and the Off-Net-Cost Pricing Principle," RAND Journal of Economics, The RAND Corporation, vol. 34(2), pages 370-90, Summer.
    4. Littlechild, S.C., 0. "Mobile termination charges: Calling Party Pays versus Receiving Party Pays," Telecommunications Policy, Elsevier, vol. 30(5-6), pages 242-277, June.
    5. Armstrong, M., 1996. "Network interconnection," Discussion Paper Series In Economics And Econometrics 9625, Economics Division, School of Social Sciences, University of Southampton.
    6. Doh Shin Jeon & Jean Jacques Laffont & Jean Tirole, 2001. "On the receiver pays principle," Economics Working Papers 561, Department of Economics and Business, Universitat Pompeu Fabra.
    7. Mark Armstrong & Julian Wright, 2009. "Mobile Call Termination," Economic Journal, Royal Economic Society, vol. 119(538), pages F270-F307, 06.
    8. Tommaso Valletti & George Houpis, 2005. "Mobile Termination: What is the “Right” Charge?," Journal of Regulatory Economics, Springer, vol. 28(3), pages 235-258, November.
    9. Armstrong, Mark, 1998. "Network Interconnection in Telecommunications," Economic Journal, Royal Economic Society, vol. 108(448), pages 545-64, May.
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