Interconnection and competition among asymmetric networks in the Internet backbone market

Eric Jahn, Jens Prüfer

Research output: Contribution to journalArticlepeer-review

24 Citations (Scopus)


We examine the interrelation between interconnection and competition in the Internet backbone market. Networks that are asymmetric in size choose among different interconnection regimes and compete for end-users. We show that a direct interconnection regime, peering, softens competition as compared to indirect interconnection since asymmetries become less influential when networks peer. If interconnection fees are paid, the smaller network pays the larger one. Sufficiently symmetric networks enter a Peering agreement while others use an intermediary network for exchanging traffic. This is in line with considerations of a non-US policy maker. In contrast, US policy makers prefer that relatively asymmetric networks peer.

Original languageEnglish
Pages (from-to)243-256
Number of pages14
JournalInformation Economics and Policy
Issue number3
Publication statusPublished - Sep 2008


  • Asymmetric networks
  • Endogenous network interconnection
  • Internet backbone
  • Two-way access pricing

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