Antitrust Analysis for the Internet Upstream Market: A Bgp Approach

Cambridge Economics Working Paper No. 0554

31 Pages Posted: 27 Nov 2005

See all articles by Emanuele Giovannetti

Emanuele Giovannetti

Anglia Ruskin University - Institute for International Management Practice, LAIBS

Alessio D'Ignazio

University of Cambridge - Faculty of Economics and Politics

Date Written: November 2005

Abstract

In this paper we study concentration in the European Internet upstream access market. The possibility of measuring market concentration depends on a correct definition of the market itself; however, this is not always possible, since, as it is the case of the Internet industry, very often Antitrust authorities lack reliable pricing and traffic data. This difficulty motivates our paper. We present an alternative approach based on the inference of the Internet Operators interconnection policies using micro-data sourced from their Border Gateway Protocol tables.

We assess market concentration following a two step process: firstly we propose a price-independent algorithm for defining both the vertical and geographical relevant market boundaries, then we calculate market concentration indexes using two novel metrics. These assess, for each undertaking, both its role in terms of essential network facility and of wholesale market dominance. The results, applied to four leading Internet Exchange Points in London, Amsterdam, Frankfurt and Milan, show that some vertical segments of these markets are highly concentrated, while others are extremely competitive. According to the Merger Guidelines some of the estimated market concentration values would immediately fall within the special attention category.

Keywords: Network Industries, Internet, Market Concentration, Essential Facilities, BGP

JEL Classification: K21, L40, L86, L96

Suggested Citation

Giovannetti, Emanuele and D'Ignazio, Alessio, Antitrust Analysis for the Internet Upstream Market: A Bgp Approach (November 2005). Cambridge Economics Working Paper No. 0554. Available at SSRN: https://ssrn.com/abstract=851045 or http://dx.doi.org/10.2139/ssrn.851045

Emanuele Giovannetti (Contact Author)

Anglia Ruskin University - Institute for International Management Practice, LAIBS ( email )

East Road
Cambridge, Cambridgeshire CB1 1PT
United Kingdom

HOME PAGE: http://anglia.ac.uk/ruskin/en/home/faculties/aibs/staff_profiles/all_staff/emanuele_giovannetti.html

Alessio D'Ignazio

University of Cambridge - Faculty of Economics and Politics ( email )

Austin Robinson Building
Sidgwick Avenue
Cambridge, CB3 9DD
United Kingdom

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