Abstract
Peering and transit are two types of Internet interconnection among ISPs. Peering has been a core concept to sustain Internet industry. However, for the past several years, many ISPs broke their peering arrangement because of asymmetric traffic pattern and asymmetric benefit and cost from the peering. Even though traffic flows are not a good indicator of the relative benefit of an Internet interconnection between the ISPs, it is needless to say that cost is a function of traffic and the only thing that we can know for certain is inbound/outbound traffic volumes between the ISPs. In this context, we suggest Max {inbound traffic volume, outbound traffic volume} as an alternative criterion to determine the Internet settlement between ISPs and we demonstrate this rule makes ISPs easier to make a peering arrangement. In our model, the traffic volume is a function of a market share. We will show the market share decides traffic volume, which is based on the settlement between ISPs. As a result, we address the current interconnection settlement problem with knowledge of inbound and outbound traffic flows and we develop an analytical framework to explain the Internet interconnection settlement.
Chapter PDF
References
Cawley, Richard A., (1997). “Interconnection, Pricing, and Settlements: Some Healthy Jostling in the Growth of the Internet,” in Kahin, Brian and Keller, James H., ( 1997 ). Coordinating the Internet. MA. MIT Press, pp 346–76.
Halabi, Sam, (1997). Internet Routing Architectures, Cisco Press, Indianapolis, IN
Halabi, Sam, (2000). Internet Routing Architectures 2°d Edition, Cisco Press, Indianapolis, IN.
Huston, Geoff, (1998). ISP Survival Guide, Wiley, New York.
Kende, Michael, (2000) “The Digital Handshake: Connecting backbone markets,” the FCC Working Paper No. 32.
Martin, L, (2001). “Backbone Web Hosting Measurements,” Boardwatch Magazine. http://www.ispworld.com/isp/Performance_Test.htm.
Milgrom, Paul, Mitchell and Srinagesh, (1999) “Competitive Effect of Peering Policies,” 27th Telecommunications Policy Research Conference.
Minoli, Daniel and Schmidt, Andrew, (1998). Internet Architecture, Wiley, New York.
USGAO, (2001). “Characteristics and Choice of Internet Users,” GAO-01–345.
Weinberg, Neil, (2000). “Backbone Bullies,” Forbes, June 12.
Williams, James G. and Sochats, Kenneth, (1999). “Investigating of ISP Interstate Traffic for Selected Internet Applications.”
Author information
Authors and Affiliations
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2002 Springer Science+Business Media New York
About this chapter
Cite this chapter
Weiss, M.B., Shin, S. (2002). Internet Interconnection Economic Model and its Analysis: Peering and Settlement. In: Chapin, L. (eds) Communication Systems. IFIP WCC TC6 2002. IFIP — The International Federation for Information Processing, vol 92. Springer, Boston, MA. https://doi.org/10.1007/978-0-387-35600-6_10
Download citation
DOI: https://doi.org/10.1007/978-0-387-35600-6_10
Publisher Name: Springer, Boston, MA
Print ISBN: 978-1-4757-4809-3
Online ISBN: 978-0-387-35600-6
eBook Packages: Springer Book Archive