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Network Formation in Peering

In: Network Economics and the Allocation of Savings

Author

Listed:
  • Philipp Servatius

    (Université de Fribourg)

Abstract

This chapter revolves around the process of network formation among VoIP firms. Under which conditions will the firms enter peering agreements and what will the resulting cooperation network look like? We apply a number of different approaches, not only with respect to the modus operandi of network formation, but also with regard to the general settings in which the firms operate. Each such situation is analyzed from two polar viewpoints regarding the access fees. In one scenario, we ignore any changes to access revenues, regardless of peering, while in the other we presume that access fees are dropped completely, once peering is agreed upon. Our goal is to find a simple, transparent and realistic access charge regime under which all VoIP firms have the incentive to peer with as many of others as possible. This is also in the best interest of a regulator, as it promotes the transition to comprehensive NGN infrastructure, leaving behind the need to consider multiple types of networks (see European Regulators Group 2009).

Suggested Citation

  • Philipp Servatius, 2012. "Network Formation in Peering," Lecture Notes in Economics and Mathematical Systems, in: Network Economics and the Allocation of Savings, chapter 0, pages 235-267, Springer.
    • Handle: RePEc:spr:lnechp:978-3-642-21096-9_6
    DOI: 10.1007/978-3-642-21096-9_6
    as

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