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- W2247382252 abstract "The remarkable connectivity of the Internet is often taken for granted. Thousands of competing Internet Service Providers (“ISPs”) have voluntarily connected their networks together to form the commercial Internet without the need for government regulation. It is often assumed or argued that “market forces” or “positive network externalities” drove commercial ISPs to interconnect and compete with one another. However, economic models suggest that firms in network industries have, at best, mixed incentives for voluntary interconnection. Moreover, a comparative look at historical examples of competitive and unregulated telecommunications markets (namely the competitive period in early telephony (1894-1921), the pre-Internet online services industry (1979-1994) and the emerging market for Instant Messaging services (1996-present)) also suggest that the first instinct of commercial firms is not to interconnect and compete, but to compete without interconnection or to engage in collusive interconnection (e.g. through merger).This paper provides a framework by which rival firms’ incentives for interconnection in unregulated telecommunications markets may be analyzed and argues that the widespread voluntary interconnection observed among ISPs is anomalous. However, the fact that it is anomalous provides an opportunity to discover or at least eliminate explanations for the remarkable connectivity observed among ISPs through a comparative analysis. The comparative analysis reveals that (1) competitive forces in telecommunications markets will not necessarily drive firms to interconnect their networks voluntarily as there are other options to them, and (2) government actions played an important role in shaping the interconnection behavior competing firms in telecommunications markets. These results have implications for telecommunications policy, and interconnection regulation in particular." @default.
- W2247382252 created "2016-06-24" @default.
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- W2247382252 date "2003-03-23" @default.
- W2247382252 modified "2023-09-22" @default.
- W2247382252 title "Explaining Internet Connectivity: Voluntary Interconnection Among Commercial Internet Service Providers" @default.
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