Agglomeration in Internet Co-operation Peering Agreements

Emanuele Giovannetti, Karsten Neuhoff () and Giancarlo Spagnolo

Cambridge Working Papers in Economics from Faculty of Economics, University of Cambridge

Abstract: Peering decisions between Internet Service Providers contain substantial non-measurable aspects requiring trust and informal cooperation among peering partners. We study whether spatial agglomeration is observed between Internet peers. Our empirical analysis of the bilateral peering decisions at the Milan Internet Exchange confirms that these decisions are significantly influenced by: travel time between ISPs headquarters- a proxy for distance, bandwidth- a proxy for size, and European connectivity. Proximity still plays a role in reducing the transaction costs of monitoring and punishing deviant behavior within an industry were co-operation is essential for efficient traffic exchanges required by the Internet universal connectivity.

Keywords: Peering; Internet; Agglomeration; Network Industries; Districts (search for similar items in EconPapers)
JEL-codes: L86 L96 R12 Z13 (search for similar items in EconPapers)
Pages: 21
Date: 2005-01
New Economics Papers: this item is included in nep-geo and nep-net
Note: IO
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:cam:camdae:0505

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