Peering and Settlement in the Internet: An Economic Analysis
AbstractThis paper explores the implications of Internet peering in the context of a model of competing, vertically integrated Internet Access Providers. We show that if regulation forbids settlement payments between firms, there will be under-investment in capacity and under-pricing of usage, both of which lead to excessive congestion. To overcome these problems, firms that are net providers of Internet infrastructure should be allowed to charge firms that are net users. We characterize the efficient level of these access payments, assuming usage can be appropriately measured. We find that refusal to peer and the charging of settlement payments may well be efficiency enhancing. Copyright 2000 by Kluwer Academic Publishers
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Springer in its journal Journal of Regulatory Economics.
Volume (Year): 18 (2000)
Issue (Month): 2 (September)
Contact details of provider:
Web page: http://www.springerlink.com/link.asp?id=100298
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Narine Badasyan & Subhadip Chakrabarti, 2003.
"Private Peering Among Internet Backbone Providers,"
0301002, EconWPA, revised 20 Jan 2003.
- Narine Badasyan & Subhadip Chakrabarti, 2004.
"Intra-backbone and Inter-backbone Peering Among Internet Service Providers,"
- Narine Badasyan & Subhadip Chakrabarti, 2004. "Intra-backbone and Inter-backbone Peering Among Internet Service Providers," Industrial Organization 0407004, EconWPA.
- Baglioni, Laura & Calabrese, Armando & Ghiron, Nathan Levialdi, 2013. "Net neutrality at internet backbone provider level," 24th European Regional ITS Conference, Florence 2013 88506, International Telecommunications Society (ITS).
- Sujit Chakravorti & Roberto Roson, 2004.
"Platform competition in two-sided markets: the case of payment networks,"
Working Paper Series
WP-04-09, Federal Reserve Bank of Chicago.
- Chakravorti Sujit & Roson Roberto, 2006. "Platform Competition in Two-Sided Markets: The Case of Payment Networks," Review of Network Economics, De Gruyter, vol. 5(1), pages 1-25, March.
- Armstrong, Mark, 2001. "The theory of access pricing and interconnection," MPRA Paper 15608, University Library of Munich, Germany.
- Foros, Oystein & Jarle Kind, Hans & Yngve Sand, Jan, 2005. "Do internet incumbents choose low interconnection quality?," Information Economics and Policy, Elsevier, vol. 17(2), pages 149-164, March.
- Joan Calzada & Francesc Trillas, 2005. "The interconnection prices in telecomunications: from theory to practice," Hacienda Pública Española, IEF, vol. 173(2), pages 85-125, June.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Guenther Eichhorn) or (Christopher F. Baum).
If references are entirely missing, you can add them using this form.