Revenue distribution in a quality-centric internet interconnection market

The economic principals of today’s internet have facilitated the rapid development of the digital economy. However, contentproviders with business models that are based on Voice over IP, internet-based TV or Software-as-a-Service have higherquality requirements than other internet companies. Thus, network operators are discussing the introduction of qualitydifferentiated transport classes (QoS). This article uses the methodology of agent-based computational economics (ACE) toassess the economics of a QoS interconnection market. Based on real-world market data we choose a representative set ofnetworks for simulating the value distribution among different network types in three market phases. Moreover, we analyzewhich network properties correlate with market success. The results suggest that content providers have strong incentives toestablish direct interconnections with access providers. Thus, transit providers will be bypassed and face falling revenues.Access network providers will be able to collect most transport revenues and refinance infrastructure investments

Network Neutrality and the Evolution of the Internet

In order to create incentives for Internet traffic providers not to discriminate with respect to certain applications on the basis of network capacity requirements, the concept of market driven network neutrality is introduced. Its basic characteristics are that all applications are bearing the opportunity costs of the required traffic capacities. An economic framework for market driven network neutrality in broadband Internet is provided, consisting of congestion pricing and quality of service differentiation. However, network neutrality regulation with its reference point of the traditional TCP would result in regulatory micromanagement of traffic network management. --Broadband Internet,network neutrality,quality of service differentiation,congestion pricing,interclass externality pricing,interconnection agreements

Network neutrality and the evolution of the internet

In order to create incentives for Internet traffic providers not to discriminate with respect to certain applications on the basis of network capacity require-ments, the concept of market driven network neutrality is introduced. Its basic characteristics are that all applications are bearing the opportunity costs of the required traffic capacities. An economic framework for market driven network neutrality in broadband Internet is provided, consisting of congestion pricing and quality of service differentiation. However, network neutrality regulation with its reference point of the traditional TCP would result in regulatory micro-management of traffic network management. --

TOWARDS SUSTAINABLE QUALITY OF SERVICE IN INTERCONNECTION

This paper analyses the structure of the Internet marketplace and the business relationships of key players involved in network services provision. A brief overview of existing pricing policies and research work in this area is presented and some new issues are introduced. We believe that the role of information asymmetry is critical when considering agreements for Internet access and interconnection. In negotiation and contract preparation, information asymmetry gives rise to adverse selection. The current structure of connectivity agreements does not address information asymmetries thus allowing the possibility of opportunistic behaviour in the form of moral hazard. Inasmuch as interconnection agreements involve sharing and/or exchanging network resources, either party will tend to exploit the agreement to its own advantage (i.e. conserving its own resources) and, possibly, to the detriment of the other (i.e. overutilising the other’s resources). The discussion focuses on interconnection agreements between Internet Service Providers, namely peering and transit. The paper concludes with an outline of an incentive compatible mechanism that can sustain quality of service requirements in interconnection agreements.interconnection information asymmetry

Sustaining a Vertically Disintegrated Network through a Bearer Service Market

Based upon the Internet perspective, this chapter will attempt to clarify and revise several ideas about the separation between infrastructure facilities and service offerings in digital communications networks. The key notions that we will focus on in this paper are: i) the bearer service as a technology-independent interface which exports blind network functionality to applications development; ii) the sustainability of an independent market for bearer service and the organizational consequences associated with such a market

A Public Option for the Core

This paper is focused not on the Internet architecture – as defined by layering, the narrow waist of IP, and other core design principles – but on the Internet infrastructure, as embodied in the technologies and organizations that provide Internet service. In this paper we discuss both the challenges and the opportunities that make this an auspicious time to revisit how we might best structure the Internet’s infrastructure. Currently, the tasks of transit-between-domains and last-mile-delivery are jointly handled by a set of ISPs who interconnect through BGP. In this paper we propose cleanly separating these two tasks. For transit, we propose the creation of a “public option” for the Internet’s core backbone. This public option core, which complements rather than replaces the backbones used by large-scale ISPs, would (i) run an open market for backbone bandwidth so it could leverage links offered by third-parties, and (ii) structure its terms-of-service to enforce network neutrality so as to encourage competition and reduce the advantage of large incumbents

Open Layered Networks: the Growing Importance of Market Coordination

Based upon the Internet perspective, this paper will attempt to clarify and revise several ideas about the separation between infrastructure facilities and service offerings in digital communications networks. The key notions that we will focus on in this paper are: i) the bearer service as a technology-independent interface which exports blind network functionality to applications development; ii) the organizational consequences associated with the emergence of a sustainable market of bearer service: a clear movement at the level of industrial structure from traditional hierarchies to more market coordination

A Proposal of Business Model Design Parameters for Future Internet Carriers

Future Internet evolution requires innovative strategic stances and the design of original business models from actors involved in the ecosystem. The study focuses on Internet Carriers, recently striving to make their business sustainable, and proposes to enclose in a single reference framework all the critical levers, either consolidated or innovative, such actors can employ in order to design their value proposition, value network integration, and financial configuration. The framework grounds its findings on multiple case studies, and, by presenting an insightful list of business model parameters for Carriers, sheds light on key emerging strategic and tactical trends in the Internet interconnections market