Exploring the Effect of Traffic Differentiation on Interconnection Cost Sharing

Ruzana Davoyan (), Jörn Altmann and Wolfgang Effelsberg
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Wolfgang Effelsberg: Technology Management, Economics, and Policy Program (TEMEP), Seoul National University

No 201042, TEMEP Discussion Papers from Seoul National University; Technology Management, Economics, and Policy Program (TEMEP)

Abstract: This paper addresses the inter-provider costs sharing issue by exploring the effect of the traffic differentiation on the interconnection payments. In particular, we determine an original initiator of a transmission by means of traffic differentiation into two types, referred to as native and stranger. Unlike the existing financial settlement, under which the interconnection payments are made based on the net traffic flow, the proposed model governs cost compensations according to the differentiated traffic flows. Analytical studies were provided using Nash bargaining solution to explore how the determination of a transmission initiator affects intercarrier compensation. For this analysis we considered reciprocal and non-reciprocal access charges.

Keywords: Interconnection arrangement; intercarrier compensation; Internet economics (search for similar items in EconPapers)
JEL-codes: C61 C62 D40 D45 D86 L14 L86 L96 M15 M21 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2010-01, Revised 2010-01
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Published in ICOMP 2009, International Conference on Internet Computing, Las Vegas, USA, July 2009

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http://temep-repec.my-groups.de/DP-42.pdf First version, 2010 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:snv:dp2009:201042

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