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Intercarrier Compensation in Unilateral and Bilateral Arrangements

Author

Listed:
  • Ruzana Davoyan

  • Jorn Altmann

  • Wolfgang Effelsberg

    (Technology Management, Economics, and Policy Program (TEMEP), Seoul National University)

Abstract

In terms of intercarrier compensation traffic flows are measured to allocate the costs between networks. This method provides a poor basis for sharing any costs. In this work we analyze the benefits of the traffic differentiation on the interconnection charges in unilateral and bilateral arrangements. We determine an original initiator of a transmission and compensate differently for the distinguished traffic flows. The presented approach was compared with the existing solutions, which perform cost compensation based on the traffic flows.

Suggested Citation

  • Ruzana Davoyan & Jorn Altmann & Wolfgang Effelsberg, 2010. "Intercarrier Compensation in Unilateral and Bilateral Arrangements," TEMEP Discussion Papers 201041, Seoul National University; Technology Management, Economics, and Policy Program (TEMEP), revised Jan 2010.
    • Handle: RePEc:snv:dp2009:201041
    as

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    File URL: http://temep-repec.my-groups.de/DP-41.pdf
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    References listed on IDEAS

    as
    1. Mark Armstrong, 2006. "Competition in two‐sided markets," RAND Journal of Economics, RAND Corporation, vol. 37(3), pages 668-691, September.
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    4. Ruzana Davoyan & Jorn Altmann, 2010. "Investigating the Role of a Transmission Initiator in Private Peering Arrangements," TEMEP Discussion Papers 201043, Seoul National University; Technology Management, Economics, and Policy Program (TEMEP), revised Jan 2010.
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    8. Ruzana Davoyan & Jorn Altmann & Wolfgang Effelsberg, 2010. "A New Bilateral Arrangement between Interconnected Providers," TEMEP Discussion Papers 201044, Seoul National University; Technology Management, Economics, and Policy Program (TEMEP), revised Jan 2010.
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    Full references (including those not matched with items on IDEAS)

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    Keywords

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    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • D45 - Microeconomics - - Market Structure, Pricing, and Design - - - Rationing; Licensing
    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
    • 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
    • M15 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - IT Management
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics

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