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This paper discusses the economics of the Internet backbone. The author discusses competition on the Internet backbone as well as relevant competition policy issues. In particular, he shows how public protocols, ease of entry, very fast network expansion, connections by the same Internet Service Provider ("ISP"), and connections by the same large web site to multiple ISPs (customer multi-homing) enhance price and competition and make it very unlikely that any firm providing Internet backbone connectivity would find it profitable to degrade or sever interconnection with other backbones in an attempt to monopolize the Internet backbone.
This paper discusses the economics of the Internet backbone. The author discusses competition on the Internet backbone as well as relevant competition policy issues. In particular, he shows how public protocols, ease of entry, very fast network expansion, connections by the same Internet Service Provider ("ISP"), and connections by the same large web site to multiple ISPs (customer multi-homing) enhance price and competition and make it very unlikely that any firm providing Internet backbone connectivity would find it profitable to degrade or sever interconnection with other backbones in an attempt to monopolize the Internet backbone.
