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Estimating Market Power in the Internet Backbone Using Band-X data

Author

Listed:
  • Giovannetti, E.
  • Ristuccia, C.A.

Abstract

Recent industry studies found the Internet backbone industry competitive. In our paper we explore a novel route to monitor for market power using prices and quality data from Band-X. First we test the hypothesis that Europe is a connectivity market on its own, unchallenged by the US and then, by using a Panel data Regression, we find that these markets are not very competitive since brand effects play a major role because price variations are only marginally affected by qualitative dimensions. More worryingly we find that companies with high prices are often able to supply an inferior quality I.P. transit.

Suggested Citation

  • Giovannetti, E. & Ristuccia, C.A., 2003. "Estimating Market Power in the Internet Backbone Using Band-X data," Cambridge Working Papers in Economics 0332, Faculty of Economics, University of Cambridge.
  • Handle: RePEc:cam:camdae:0332
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    Cited by:

    1. Lippert, Steffen & Spagnolo, Giancarlo, 2008. "Internet peering as a network of relations," Telecommunications Policy, Elsevier, vol. 32(1), pages 33-49, February.
    2. Alessio D'Ignazio & Emanuele Giovannetti, 2005. "Antitrust Analysis for the Internet Upstream Market: a BGP Approach," Working Papers 37, Economic Research Southern Africa.
    3. Giovannetti, E. & Neuhoff, K. & Spagnolo, G., 2005. "Agglomeration in Internet Co-operation Peering Agreements," Cambridge Working Papers in Economics 0505, Faculty of Economics, University of Cambridge.
    4. D'Ignazio, A. & Giovannetti, E., 2004. "From Exogenous to Endogenous Networks: Internet Applications," Cambridge Working Papers in Economics 0445, Faculty of Economics, University of Cambridge.

    More about this item

    Keywords

    Internet; Market Power; Backbone; Competition Policy; Network Industries;

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications

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