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Interconnection Economics of All-IP Networks

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Author Info
Kiho Yoon () (Department of Economics, Korea University)

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Abstract

This paper is an exploratory study on the interconnection economics of All-IP networks. To understand the economics of the yet-to-be-realized All-IP networks, this paper begins with discussing three important features of current IP networks: packet switching, receiver benefit, and two-sidedness. It then develops simple models of interconnection for basic fixed fee settlements and for session-based charges. The analysis shows that interconnection settlements depend on network size, market competitiveness, direct and cross network externalities, and costs. Some policy issues are also briefly discussed.

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Publisher Info
Article provided by Concept Economics in its journal Review of Network Economics.

Volume (Year): 5 (2006)
Issue (Month): 3 (September)
Pages: 351-365
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Handle: RePEc:rne:rneart:v:5:y:2006:i:2:p:351-365

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Related research
Keywords: Interconnection; Internet protocol; two-sided;

References listed on IDEAS
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  1. Mark Armstrong & Julian Wright, 2007. "Two-sided Markets, Competitive Bottlenecks and Exclusive Contracts," Economic Theory, Springer, vol. 32(2), pages 353-380, August. [Downloadable!] (restricted)
  2. Crémer, Jacques & Rey, Patrick & Tirole, Jean, 1999. "Connectivity in the Commercial Internet," IDEI Working Papers 87, Institut d'Économie Industrielle (IDEI), Toulouse, revised 2000. [Downloadable!]
    Other versions:
  3. Jean-Jacques Laffont & Jean Tirole, 2001. "Competition in Telecommunications," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262621509.
  4. Rochet, Jean-Charles & Tirole, Jean, 2003. "Platform Competition in Two-Sided Markets," IDEI Working Papers 152, Institut d'Économie Industrielle (IDEI), Toulouse. [Downloadable!]
    Other versions:
  5. Laffont, Jean-Jacques & Marcus, Scott & Rey, Patrick & Tirole, Jean, 2001. "Internet Interconnection and the Off-Net-Cost Pricing Principle," IDEI Working Papers 130, Institut d'Économie Industrielle (IDEI), Toulouse. [Downloadable!]
    Other versions:
  6. Stanley Besen et al., 2001. "Advances in Routing Technologies and Internet Peering Agreements," American Economic Review, American Economic Association, vol. 91(2), pages 292-296, May. [Downloadable!] (restricted)
  7. 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. [Downloadable!] (restricted)
  8. Armstrong, Mark, 2001. "The theory of access pricing and interconnection," MPRA Paper 15608, University Library of Munich, Germany. [Downloadable!]
  9. Michael Carter & Julian Wright, 1999. "Interconnection in Network Industries," Review of Industrial Organization, Springer, vol. 14(1), pages 1-25, February. [Downloadable!] (restricted)
  10. Doyle, Chris & Smith, Jennifer C., 1998. "Market structure in mobile telecoms: qualified indirect access and the receiver pays principle," Information Economics and Policy, Elsevier, vol. 10(4), pages 471-488, December. [Downloadable!] (restricted)
  11. Kim, Jeong-Yoo & Lim, Yoonsung, 2001. "An economic analysis of the receiver pays principle," Information Economics and Policy, Elsevier, vol. 13(2), pages 231-260, June. [Downloadable!] (restricted)
    Other versions:
  12. David S. Evans & Andrei Hagiu & Richard Schmalensee, 2004. "A Survey Of The Economic Role Of Software Platforms In Computer - Based Industries," Discussion papers 04032, Research Institute of Economy, Trade and Industry (RIETI). [Downloadable!]
    Other versions:
  13. Mark Armstrong, 2005. "Competition in Two-Sided Markets," Industrial Organization 0505009, EconWPA. [Downloadable!]
    Other versions:
  14. Doh-Shin Jeon & Jean-Jacques Laffont & Jean Tirole, 2004. "On the Receiver-Pays Principle," RAND Journal of Economics, The RAND Corporation, vol. 35(1), pages 85-110, Spring.
    Other versions:
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This page was last updated on 2009-11-16.

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