Internet Peering as a Network of Relations

41 Pages Posted: 22 Jun 2007

See all articles by Steffen Lippert

Steffen Lippert

University of Auckland - Department of Economics

Giancarlo Spagnolo

Stockholm School of Economics (SITE); Centre for Economic Policy Research (CEPR); University of Rome 'Tor Vergata'; EIEF

Date Written: June 21, 2007

Abstract

This paper applies results from recent theoretical work on networks of relations to analyze optimal peering strategies for asymmetric ISPs. From a network of relations perspective, ISPs' asymmetry in bilateral peering agreements need not be a problem, since when these form a closed network, asymmetries are pooled and information transmission is faster. Both these effects reduce the incentives for opportunism in general, and interconnection quality degradation in particular. The paper also explains why bilateral monetary transfers between asymmetric ISPs (Bilateral Paid Peering), though potentially good for bilateral peering, may have negative effects on the sustainability of the overall peering network.

Keywords: Internet Service Provider, Internet Peering Agreements, Transit, Networks of Relations, Quality Degradation, Implicit Contracts

JEL Classification: L96, L23

Suggested Citation

Lippert, Steffen and Spagnolo, Giancarlo, Internet Peering as a Network of Relations (June 21, 2007). Available at SSRN: https://ssrn.com/abstract=995636 or http://dx.doi.org/10.2139/ssrn.995636

Steffen Lippert (Contact Author)

University of Auckland - Department of Economics ( email )

Auckland
New Zealand

Giancarlo Spagnolo

Stockholm School of Economics (SITE) ( email )

P.O. Box 6501
Stockholm
Sweden

HOME PAGE: http://https://sites.google.com/site/giancarlospagnoloshomepage/

Centre for Economic Policy Research (CEPR)

London
United Kingdom

University of Rome 'Tor Vergata' ( email )

Faculty of Economics - DEI
Via Columbia 2
Rome, RM 00133
Italy

EIEF ( email )

Via Due Macelli, 73
Rome, 00187
Italy

HOME PAGE: http://WWW.EIEF.IT

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