Study On Interconnection Between Internet Backbone Providers

On the basis of international studies and considering the actual in China, this article makes a further discussion on the theory of Internet interconnection. And it also makes relevant demonstrations and settlement suggestions on Internet interconnection in China.The article consists of 6 chapters, in which the first and sixth chapters are introduction and some problems. From the second part to the fifth one are kernel parts of the article, which mostly work over backbone interconnection decision, value of backbones and Internet settlement. Showing details as follow:The first chapter is the start of the paper. At the beginning, it introduced some definition about Internet interconnection. Then it recommended the necessity of the study, which focuses on the analysis on the disputation of Internet backbone interconnection decision and Internet settlement. Finally, it expatiated on the intention, content and innovation of the paper.Chapter 2 analyzes internet market in the U.S. and China and theory description.Chapter 3 develops a non-cooperative and cooperative game model to analyze the interconnection decision between two Internet Backbone Providers (IBPs) . The decision is built on the base of the maximum of enterprises' profits, under the condition of cooperative game. Two IBPs make interconnection decision to choose interconnection quality as to achieve the maximum of associated profits. The cooperative game model can not only be applied to the interconnection decision of two IBP on Internet, but also ISPs, IBP and ISP, and interconnection decision of two enterprises locating in other industries characterizing of network externality.Chapter 4 develops a simple game theoretical model to analyze the interconnection decision of two IBPs (Internet backbone providers) . Based on profit maximization, they decide who they want to peer with and who has to pay transit with cost principle. Furthermore, the paper compares IBPs interconnected decision behavior under different decision principles (cost principle and competition principle) . The conclusion indicates, in initial stage of development of Internet, IBPs adopt the competition principle to carry on interconnected decision, during the course of developing to be certain in Internet, at this moment when most users connect to the Internet; IBPs adopt cost principle to carry on interconnected decision. Different user structure of two IBPs make their interconnected decision incline have a difference.Chapter 5 studies the necessary of inter-network settlement and develops an analytical framework to study the Internet interconnection settlement issues. The paper shows multiple linear regression application on assessment of Internet Backbone Providers' (IBPs') network value. Then their exchange rate is weighted by network value, we can draw rate weighted by network value. This rate reflects contribution of each network to interconnection and the use by each party of the interconnected network resources.In chapter 6, we explain the realm which is not mentioned in the above chapters.Due to the limitation of the author, there is some shortage in our research need to be improved. Furthermore, the regulation issues of internet interconnection are under way. They are worth making a further research.