‘Unfair’ Discrimination in Two-sided Peering? Evidence from LINX
AbstractDoes asymmetry between Internet Providers affect the “fairness” of their interconnection contracts? While recent game theoretic literature provides contrasting answers to this question, there is a lack of empirical research. We introduce a novel dataset on micro-interconnection policies and provide an econometric analysis of the determinants of peering decisions amongst the Internet Service Providers interconnecting at the London Internet Exchange Point (LINX). Our key result shows that two different metrics, introduced to capture asymmetry, exert opposite effects. Asymmetry in “market size” enhances the quality of the link, while asymmetry in “network centrality” induces quality degradation, hence “unfairer” interconnection conditions.
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 InfoPaper provided by Faculty of Economics, University of Cambridge in its series Cambridge Working Papers in Economics with number 0621.
Date of creation: Feb 2006
Date of revision:
Contact details of provider:
Web page: http://www.econ.cam.ac.uk/index.htm
Internet Peering; Two-sided Markets; Network Industries; Antitrust;
Find related papers by JEL classification:
- L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
- L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
- L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications
- C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
- L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-03-05 (All new papers)
- NEP-COM-2006-03-05 (Industrial Competition)
- NEP-MIC-2006-03-05 (Microeconomics)
- NEP-NET-2006-03-05 (Network Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Matthew O. Jackson & Asher Wolinsky, 1995.
"A Strategic Model of Social and Economic Networks,"
1098R, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Narine Badasyan & Subhadip Chakrabarti, 2003.
"Private Peering Among Internet Backbone Providers,"
- Martin B. Weiss & Seung Jae Shin, 2004. "Internet Interconnection Economic Model and its Analysis: Peering and Settlement," Netnomics, Springer, vol. 6(1), pages 43-57, 04.
- Thorsten Wichmann & Pio Baake, 1998.
"On the Economics of Internet Peering,"
Berlecon Research Papers
0004, Berlecon Research.
- Venkatesh Bala & Sanjeev Goyal, 2000. "A Noncooperative Model of Network Formation," Econometrica, Econometric Society, vol. 68(5), pages 1181-1230, September.
- Cremer, Jacques & Rey, Patrick & Tirole, Jean, 2000.
"Connectivity in the Commercial Internet,"
Journal of Industrial Economics,
Wiley Blackwell, vol. 48(4), pages 433-72, December.
- Foros, Oystein & Kind, Hans Jarle & Sorgard, Lars, 2002.
"Access Pricing, Quality Degradation, and Foreclosure in the Internet,"
Journal of Regulatory Economics,
Springer, vol. 22(1), pages 59-83, July.
- Foros, Oystein & Kind, Hans Jarle & SÃ¸rgard, Lars, 2003. "Access Pricing, Quality Degradation, and Foreclosure in the Internet," University of California at Santa Barbara, Economics Working Paper Series qt62p0k04c, Department of Economics, UC Santa Barbara.
- Giovannetti, Emanuele, 2002.
"Interconnection, differentiation and bottlenecks in the Internet,"
Information Economics and Policy,
Elsevier, vol. 14(3), pages 385-404, September.
- Giovannetti, E., 2000. "Interconnection, Differentiation and Bottlenecks in the Internet," Cambridge Working Papers in Economics 0011, Faculty of Economics, University of Cambridge.
- Foros, Oystein & Hansen, Bjorn, 2001. "Competition and compatibility among Internet Service Providers," Information Economics and Policy, Elsevier, vol. 13(4), pages 411-425, December.
- Mason, R., 1999. "Compatibility between differentiated networks," Discussion Paper Series In Economics And Econometrics 9909, Economics Division, School of Social Sciences, University of Southampton.
- Takanori Ida, 2005. "Analysis of Internet topology with a three-level components model," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 26(8), pages 527-534.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Howard Cobb).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.