Why have bandwidth trading markets not matured? Analysis of technological and market issues

Ferreira, Pedro; Mindel, Joshua L.; McKnight, Lee W.

doi:10.1504/ijtpm.2003.003886

Cited by 8 publications

(4 citation statements)

References 8 publications

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“…Research has demonstrated that ISPs are hampered in their ability to create efficient on-demand routes with the result that they have to lease or buy the maximum bandwidth they may need in the long run rather than reacting flexible to current demand situations [17]. Part of the problem is that sharing routing information is a cumbersome problem in protocols such as the Border Gateway Protocol (BGP).…”

Section: Bandwidth Trading Between Internet Service Providersmentioning

confidence: 99%

Experimental economics and experimental computer science

Großklags

2007

Proceedings of the 2007 Workshop on Experimental Computer Science

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Section: Bandwidth Trading Between Internet Service Providersmentioning

confidence: 99%

Experimental economics and experimental computer science

Großklags

2007

Proceedings of the 2007 Workshop on Experimental Computer Science

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“…We now state the main result of this section (refer to [10] for a detailed proof): (8) Assume that price of bandwidth is given by an exponential function of the form P B(M, L).M = αM β P (L) where α ≥ 0, β ∈ (0, 1) represents the level of economies of scale and P (L) represents the dependency of this price function on the length of the link. Empirical evidence to support this sort of price function was provided in [7].…”

Section: The Cost Of Anarchymentioning

confidence: 99%

“…Finally, we want to know if the market for provisioning networks that interconnect using transit and peering agreements is efficient, that is, if Nash networks become as inexpensive as optimal networks when, for example, ISPs are allowed to choose transit prices. This paper is written at a time of dramatic reduction in the price of bandwidth [8,36], which leads smaller ISPs to peer directly with each other, thus relying less frequently on transit from Tier-1 ISPs [5,27] and creating a "peering-donut" around them. But, the declining trend in the price of bandwidth put pressure on transit prices, which also started falling significantly.…”

Section: Introductionmentioning

confidence: 99%

Inefficiency in provisioning interconnected communication networks

Ferreira

Sirbu

2005

Proceedings of the 6th ACM Conference on Electronic Commerce

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We model the Internet as a collection of Internet Service Providers (ISPs) that transit and peer to meet an exogenous demand for the transport of IP traffic among an arbitrary set of cities. The prices of bandwidth and of transit are also exogenous. ISPs are assumed to behave rationally and selfishly and therefore they provision the network that maximizes their own profit regardless of how expensive the overall network becomes. We call optimal to a network that ISPs would build if they cooperated to reduce overall provisioning costs; and we call inefficiency cost the additional cost to provision a network at Nash equilibrium relative to the provisioning cost of an optimal network. We show that inefficiency cost is primarily related to transit agreements. In fact, in a world where only peering agreements exist there is no inefficiency cost. However, networks with only peering agreements forgo the efficiencies of traffic aggregation. Transit agreements help reduce provisioning costs by realizing benefits from economies of scale. We show, by example, that there exist Nash networks that are strictly more expensive than optimal networks even when ISPs choose transit prices and therefore the market to provision communication networks with interconnection agreements designed they way the are today is inefficient. We show that inefficiency cost may be reduced, for example, by enforcing side payments between ISPs. We conclude with an analysis of the difficulties a regulator would face in endeavoring to move a market from am inefficient Nash equilibrium to optimality.

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“…There have been efforts since the early 2000s to commoditize the bandwidth market [40] and enable short-term agreements [35,37]. These early efforts failed as the required technology and standardization were missing [33], but now conditions are different. A recent survey highlights that ∼99% of the over 1.9 M surveyed peering agreements were established without any formal contract [73], indicating that operators are willing to avoid lengthy bureaucratic discussions.…”

Section: Introductionmentioning

confidence: 99%

Dynam-IX

Marcos

Chiesa

Müller

et al. 2018

Proceedings of the 14th International Conference on Emerging Networking EXperiments and Technologies

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Autonomous Systems (ASes) can reach hundreds of networks via Internet eXchange Points (IXPs), allowing improvements in traffic delivery performance and competitiveness. Despite the benefits, any pair of ASes needs first to agree on exchanging traffic. By surveying 100+ network operators, we discovered that most interconnection agreements are established through ad-hoc and lengthy processes heavily influenced by personal relationships and brand image. As such, ASes prefer long-term agreements at the expense of a potential mismatch between actual delivery performance and current traffic dynamics. ASes also miss interconnection opportunities due to trust reasons. To improve wide-area traffic delivery performance, we propose Dynam-IX, a framework that allows operators to build trust cooperatively and implement traffic engineering policies to exploit the rich interconnection opportunities at IXPs quickly. Dynam-IX offers a protocol to automate the interconnection process, an intent abstraction to express interconnection policies, a legal framework to digitally handle contracts, and a distributed tamper-proof ledger to create trust among ASes. We build and evaluate a Dynam-IX prototype and show that an AS can establish tens of agreements per minute with negligible overhead for ASes and IXPs.

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Why have bandwidth trading markets not matured? Analysis of technological and market issues

Cited by 8 publications

References 8 publications

Experimental economics and experimental computer science

Experimental economics and experimental computer science

Inefficiency in provisioning interconnected communication networks

Dynam-IX

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