INTERNET INTERCONNECTION AND THE OFF-NET-COST PRICING PRINCIPLE 2002

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http://hdl.handle.net/10138/135774
Title: INTERNET INTERCONNECTION AND THE OFF-NET-COST PRICING PRINCIPLE 2002
Author: Laffont, Jean-Jacques; Marcus, Scott; Rey, Patrick; Tirole, Jean
Belongs to series: 7
ISBN: 951-555-738-0
Abstract: The paper develops a framework for Internet backbone competition. In the absence of direct payments between websites and consumers, the access charge allocates communication costs between websites and consumers and affects the volume of traffic. The paper analyzes the impact of the access charge on competitive strategies in an unregulated retail environment. In a remarkably broad range of environments, operators set prices for their customers as if their customers' traffic were entirely off-net. The paper then compares the socially optimal access charge with the privately desirable one. Finally, when websites charge micropayments, or when websites sell goods and services, the impact of the access charge on welfare is reduced; in particular, the access charge is neutral in a range of cicumstances.
URI: http://hdl.handle.net/10138/135774
Date: 2002-08-08
Subject (ysa): Internet
networks
interconnection
competion policy


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