Private peering, transit and traffic diversion


DOI: 10.1007/s11066-006-9007-x

Cite this article as:
Badasyan, N. & Chakrabarti, S. Netnomics (2005) 7: 115. doi:10.1007/s11066-006-9007-x


Private peering refers to settlement-free connectivity agreements between Internet Service Providers meant to interconnect their networks by-passing congested National Access Points. We explore the incentives for bilateral peering with particular emphasis on traffic diversion. A private peering agreement between two providers improves the quality of both and would divert traffic from third parties. This provides an incentive for peering. A three-player model is introduced and analyzed. Complication introduced by price competition and heterogeneous consumers are also studied.


peering transit internet service providers 

JEL Code

C7 L14 

Copyright information

© Springer Science+Business Media, Inc. 2006

Authors and Affiliations

  1. 1.Department of Economics and FinanceMurray State UniversityMurrayUSA
  2. 2.School of Management and EconomicsQueen’s University BelfastBelfastUK

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