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‘Unfair’ Discrimination in Two-sided Peering? Evidence from LINX

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Author Info
D’Ignazio, A.
Giovannetti, E.

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Abstract

Does 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.

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Publisher Info
Paper provided by Faculty of Economics, University of Cambridge in its series Cambridge Working Papers in Economics with number 0621.

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Length: 23
Date of creation: Feb 2006
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Handle: RePEc:cam:camdae:0621

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Keywords: Internet Peering Two-sided Markets Network Industries Antitrust

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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 - - - Microeconomic Data
L40 - Industrial Organization - - Antitrust Issues and Policies - - - General

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References listed on IDEAS
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.:
  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. [Downloadable!]
    Other versions:
  2. Narine Badasyan & Subhadip Chakrabarti, 2003. "Private Peering Among Internet Backbone Providers," Microeconomics 0301003, EconWPA. [Downloadable!]
  3. Mason, R., 1999. "Compatibility between Differentiated Networks," Discussion Paper Series In Economics And Econometrics 9909, Economics Division, School of Social Sciences, University of Southampton.
  4. Giovannetti, Emanuele, 2002. "Interconnection, differentiation and bottlenecks in the Internet," Information Economics and Policy, Elsevier, vol. 14(3), pages 385-404, September. [Downloadable!] (restricted)
    Other versions:
  5. Venkatesh Bala & Sanjeev Goyal, 2000. "A Noncooperative Model of Network Formation," Econometrica, Econometric Society, vol. 68(5), pages 1181-1230, September.
  6. 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. [Downloadable!]
  7. Foros, Oystein & Hansen, Bjorn, 2001. "Competition and compatibility among Internet Service Providers," Information Economics and Policy, Elsevier, vol. 13(4), pages 411-425, December. [Downloadable!] (restricted)
  8. 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. [Downloadable!] (restricted)
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  9. Narine Badasyan & Subhadip Chakrabarti, 2003. "Private Peering Among Internet Backbone Providers," Industrial Organization 0301002, EconWPA, revised 20 Jan 2003. [Downloadable!]
  10. 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. [Downloadable!]
  11. Jackson, Matthew O. & Wolinsky, Asher, 1996. "A Strategic Model of Social and Economic Networks," Journal of Economic Theory, Elsevier, vol. 71(1), pages 44-74, October. [Downloadable!] (restricted)
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  12. Thorsten Wichmann & Pio Baake, 1998. "On the Economics of Internet Peering," Berlecon Research Papers 0004, Berlecon Research. [Downloadable!]
    Other versions:
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