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Agglomeration in Internet Co-operation Peering Agreements

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  • Giovannetti, E.
  • Neuhoff, K.
  • Spagnolo, G.

Abstract

Peering decisions between Internet Service Providers contain substantial non-measurable aspects requiring trust and informal cooperation among peering partners. We study whether spatial agglomeration is observed between Internet peers. Our empirical analysis of the bilateral peering decisions at the Milan Internet Exchange confirms that these decisions are significantly influenced by: travel time between ISPs headquarters- a proxy for distance, bandwidth- a proxy for size, and European connectivity. Proximity still plays a role in reducing the transaction costs of monitoring and punishing deviant behavior within an industry were co-operation is essential for efficient traffic exchanges required by the Internet universal connectivity.

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Bibliographic Info

Paper provided by Faculty of Economics, University of Cambridge in its series Cambridge Working Papers in Economics with number 0505.

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Length: 21
Date of creation: Jan 2005
Date of revision:
Handle: RePEc:cam:camdae:0505

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Web page: http://www.econ.cam.ac.uk/index.htm

Related research

Keywords: Peering; Internet; Agglomeration; Network Industries; Districts;

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Cited by:
  1. Lippert, Steffen & Spagnolo, Giancarlo, 2006. "Internet Peering as a Network of Relations," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 191, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.

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