Interconnection and Competition Among Asymmetric Networks in the Internet Backbone Market
AbstractWe examine the interrelation between interconnection and competition in the internet backbone market.Networks asymmetric in size choose among different interconnection regimes and compete for end-users.We show that a direct interconnection regime, Peering, softens competition compared to indirect interconnection since asymmetries become less influential when networks peer.If interconnection fees are paid, the smaller network pays the larger one. Sufficiently symmetric networks enter a Peering agreement while others use an intermediary network for exchanging traffic.This is in line with considerations of a non-US policy maker.In contrast, US policy makers prefer Peerings among relatively asymmetric networks.
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Bibliographic InfoPaper provided by Tilburg University, Center for Economic Research in its series Discussion Paper with number 2006-122.
Date of creation: 2006
Date of revision:
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Web page: http://center.uvt.nl
Internet Backbone; Endogenous Network Interconnection; Asymmetric Networks; Two-Way Access Pricing;
Other versions of this item:
- Jahn, Eric & Prüfer, Jens, 2008. "Interconnection and competition among asymmetric networks in the Internet backbone market," Information Economics and Policy, Elsevier, vol. 20(3), pages 243-256, September.
- Jahn, E. & Prüfer, J., 2006. "Interconnection and Competition Among Asymmetric Networks in the Internet Backbone Market," Discussion Paper 2006-033, Tilburg University, Tilburg Law and Economic Center.
- L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
- L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-12-16 (All new papers)
- NEP-COM-2006-12-16 (Industrial Competition)
- NEP-ICT-2006-12-16 (Information & Communication Technologies)
- NEP-MIC-2006-12-16 (Microeconomics)
- NEP-NET-2006-12-16 (Network Economics)
- NEP-SOC-2006-12-16 (Social Norms & Social Capital)
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