Internet Peering as a Network of Relations

We apply results from recent theoretical work on networks of relations to analyze optimal peering strategies for asymmetric ISPs. It is shown that - 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. We also explain why bilateral monetary transfers between asymmetric ISPs (Bilateral Paid Peering), though potentially good for bilateral peering, may have rather negative effects on the sustainability of the overall peering network

‘Unfair’ Discrimination in Two-sided Peering? Evidence from LINX

‘Unfair’ Discrimination in Two-sided Peering? Evidence from LINX Abstract: Does asymmetry between Internet Providers affect the “fairness” of their interconnection contracts? While recent game theoretic literature provides contrasting answers to this question, there is a lack of empirical research. We introduce a novel dataset on micro-interconnection policies and provide an econometric analysis of the determinants of peering decisions amongst the Internet Service Providers interconnecting at the London Internet Exchange Point (LINX). Our key result shows that two different metrics, introduced to capture asymmetry, exert opposite effects. Asymmetry in “market size” enhances the quality of the link, while asymmetry in “network centrality” induces quality degradation, hence “unfairer” interconnection conditions

Pervasive Gaming: Testing Future Context Aware Applications

Over the last few years, many discussions have centred around the issue of interconnection rates and their economic impact on the market. Interconnection charging in Europe is still based mainly on the calling party pays (CPP) principle combined with element based charging (EBC). Due to the convergence of the classical PSTN/ISDN and the IP world to next generation networks (NGN), the different charging principles and systems are being reviewed to determine the optimal solution for the future. In its working program for the year 2008, the Austrian Regulatory Authority (RTR) launched an industry working group on charging principles and systems for wholesale services. This paper highlights some of the central issues of the discussions that have taken place and contains the authors’ views and conclusions .1 Further, the paper identifies possible charging systems, as well as economic assessment criteria for these systems and how the different charging systems may be evaluated with respect to those criteria. Regarding the usefulness of industry working groups, the work has shown that these lead to a higher degree of transparency between regulator and market players as well as a better understanding between the market players themselves. The main drawback is that working groups are time consuming and that it is almost impossible to agree on meaningful outcomes. Regarding the assessment of the charging models it was possible to derive a set of 10 criteria according to which charging systems can be evaluated. There was a rather broad consensus on the delineation of charging models as well as the economic criteria. When it comes to the results of the evaluation, the discussions brought forward very controversial views amongst the participants. No common views could be achieved on which the charging model fulfills the defined criteria in the best manner.Interconnection, NGN, charging principles, CPP, Bill&Keep.

The Growing Complexity of Internet Interconnection

End-to-End (E2E) packet delivery in the Internet is achieved through a system of interconnections between heterogeneous entities called Autonomous Systems (ASes). The initial pattern of AS interconnection in the Internet was relatively simple, involving mainly ISPs with a balanced mixture of inbound and outbound traffic. Changing market conditions and industrial organization of the Internet have jointly forced interconnections and associated contracts to become significantly more diverse and complex. The diversity of interconnection contracts is significant because efficient allocation of costs and revenues across the Internet value chain impacts the profitability of the industry. Not surprisingly, the challenges of recovering the fixed and usage-sensitive costs of network transport give rise to more complex settlements mechanisms than the simple bifurcated (transit and peering) model described in many earlier analyses of Internet interconnection (see BESEN et al., 2001; GREENSTEIN, 2005; or LAFFONT et al., 2003). In the following, we provide insight into recent operational developments, explaining why interconnection in the Internet has become more complex, the nature of interconnection bargaining processes, the implications for cost/revenue allocation and hence interconnection incentives, and what this means for public policy. This paper offers an abbreviated version of the original paper (see FARATIN et al., 2007b).internet interconnection, economics, public policy, routing, peering.

Internet Peering as a Network of Relations

We apply results from recent theoretical work on networks of relations to analyze optimal peering strategies for asymmetric ISPs. It is shown that - 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. We also explain why bilateral monetary transfers between asymmetric ISPs (Bilateral Paid Peering), though potentially good for bilateral peering, may have rather negative effects on the sustainability of the overall peering network.

Spatial Dispersion of Peering Clusters in the European Internet

We study the role played by geographical distance in the peering decisions between Internet Service Providers. Firstly, we assess whether or not the Internet industry shows clustering in peering; we then concentrate on the dynamics of the agglomeration process by studying the effects of bilateral distance in changing the morphology of existing peering patterns. Our results show a dominance of random spatial patterns in peering agreements. The sign of the effect of distance on the peering decision, driving the agglomeration/dispersion process, depends, however, on the initial level of clustering. We show that clustered patterns will disperse in the long run