How to Provide Quality of Service Guarantees in the Internet? Lessons Learnt from the Airline and Card-Based Payment Sectors

26 Pages Posted: 15 Jun 2010

See all articles by Zouhaïer M'Chirgui

Zouhaïer M'Chirgui

affiliation not provided to SSRN

Thierry Pénard

Université de Rennes 1 - Faculte de Sciences Economiques; Armorican Mole for Research on the Information Society and Uses of the Internet; Centre de Recherche en Économie et Management (CREM)

Date Written: April 15, 2010

Abstract

The increasing demand for real-time applications (video conferencing, Internet telephony - VoIP - etc.) delivered over Internet networks requires stringent Quality of Service (QoS) guarantees. Internet traffic routing based on a Best-effort basis can hardly support these QoS requirements. This article argues that Internet services providers should form strategic alliances to coordinate their investments in a new-generation infrastructure and provide innovative services with QoS guarantees. This is supported by a topological analysis of the interconnection agreements among top-level Internet providers and by the lessons derived from alliances forged in the airline and card-based payment sectors. We conclude that on the Internet, the optimal organizational form should be a centralized alliance with a hub-and-spoke network structure.

Keywords: Internet, Quality of Service (QoS), Interconnection Agreements, Alliances, Networks

JEL Classification: L2, L86, O3

Suggested Citation

M'Chirgui, Zouhaïer and Pénard, Thierry, How to Provide Quality of Service Guarantees in the Internet? Lessons Learnt from the Airline and Card-Based Payment Sectors (April 15, 2010). Euromed Management Working Paper No. 04-2010. Available at SSRN: https://ssrn.com/abstract=1625297 or http://dx.doi.org/10.2139/ssrn.1625297

Zouhaïer M'Chirgui (Contact Author)

affiliation not provided to SSRN ( email )

Thierry Pénard

Université de Rennes 1 - Faculte de Sciences Economiques ( email )

7, Place Hoche
35000 Rennes
France

Armorican Mole for Research on the Information Society and Uses of the Internet ( email )

France

Centre de Recherche en Économie et Management (CREM) ( email )

7 place Hoche
Rennes, Bretagne 35065
France

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