Internet Peering as a Network of Relations
41 Pages Posted: 22 Jun 2007
Date Written: June 21, 2007
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: Suggested Citation