An empirical analysis of Internet providers’ interconnection strategies

Nathalie Colombier (), Zouhaïer M'Chirgui () and Thierry Pénard
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Nathalie Colombier: CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR - Université de Rennes - CNRS - Centre National de la Recherche Scientifique
Zouhaïer M'Chirgui: CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR - Université de Rennes - CNRS - Centre National de la Recherche Scientifique

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Abstract: This paper examines the structure of relationships among the major Internet service providers in order to better understand the industrial organization and interconnection strategies of these providers. We show that the network of Internet services providers exhibits a small world structure that facilitates cooperation between them (small world structure yields efficiency in terms of coordination and communication). However, the topology of the Internet is characterized by some instability related to the intense competition occurring among providers on the regional markets. Finally, we show that interconnection decisions depend on asymmetry effects, network externalities and geographical proximity.

Keywords: Internet; Peering; Interconnection Agreements; Network Externalities; Asymmetry (search for similar items in EconPapers)
Date: 2011-06
Note: View the original document on HAL open archive server: https://hal.science/hal-03468951
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Published in European Review of Industrial Economics and Policy , 2011, 2

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