The regulation of internet interconnection : assessing network market power

Abstract

Interconnection agreements in the telecommunications industry have always been constrained by regulation. Internet interconnection has not received the same level of scrutiny. Recent debates regarding proposed mergers, network neutrality, Internet peering, and last mile competition have generated much discussion about whether Internet interconnection regulation is warranted. In order to determine whether such regulation is necessary, policymakers need appropriate metrics to help gauge a network provider's market power. Since Internet interconnection agreements are typically not published publicly, policymakers must instead rely on proxy metrics and inferred interconnection relationships. Alessio D'Ignazio and Emanuele Giovannetti have attempted to address this challenge by proposing a standard set of metrics that are based on and assessed using network topology data. They suggest two metrics, referred to as customer cone and betweenness, as proxies for market size and market power. This thesis focuses on the efficacy of the proposed customer cone and betweenness metrics as proxies for network market size and market power.