Interconnection Economics of All-IP Networks

Kiho Yoon

Review of Network Economics, 2006, vol. 5, issue 3, 15

Abstract: This paper is an exploratory study on the interconnection economics of All-IP networks. To understand the economics of the yet-to-be-realized All-IP networks, this paper begins with discussing three important features of current IP networks: packet switching, receiver benefit, and two-sidedness. It then develops simple models of interconnection for basic fixed fee settlements and for session-based charges. The analysis shows that interconnection settlements depend on network size, market competitiveness, direct and cross network externalities, and costs. Some policy issues are also briefly discussed.

Date: 2006
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DOI: 10.2202/1446-9022.1102

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