Interconnection Discrimination: A Two-Sided Markets Perspective

We first motivate a methodological approach to network economics research using tools from Industrial Organization (IO). We then demonstrate the utility of such models in light of an increasingly important problem of interconnection failures that includes network neutrality problem. In particular, we focus on a subset of the problem by focusing on direct interconnection failures when ISPs price discriminate between content providers and content users. We informally show how viewing the problem as a TwoSided Market can lead to a discrimination rule which highlights the structural/distributional nature of the interconnection problem. Structural consideration has not only policy and antitrust consequences but can also be highly informative to engineering choices.