Internet Interconnection Economic Model and its Analysis: Peering and Settlement
Name
wcc2002_comsys_weiss_shin.pdf
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107.85 KB
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Adobe PDF
Checksum (MD5)
bec3ec2a2460aca083f2d19d9be3ee40
Author(s)
Shin, Seung-Jae
Weiss, Martin
Date Issued
July 22, 2002
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.
Subjects
Internet interconnection
settlement
peering
transit
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