Edited by Bernard Fingleton
Chapter 11: Agglomeration and Internet Exchange Points: An Exploration of the Internet Morphology
Alessio D’Ignazio and Emanuele Giovannetti 11.1 11.1.1 INTRODUCTION Internet Connectivity Does geographical location play a role in sustaining cooperation among Internet companies? While there is a growing literature on how information and communication technology (ICT) aﬀects inter-ﬁrm relations, less attention has been paid to their eﬀects on Internet service providers (ISPs), the ﬁrms that provide the interface between ﬁnal users and the Internet. In this chapter we investigate the possibility that geographical agglomeration of ISPs aﬀects their propensity to peer1 at Internet exchange points2 (IXPs). In particular, we focus on the over 30 IXP members of the European Internet Exchange Points Association (Euro-IX), studying more in depth, three major IXPs among them: the London Internet Exchange (LINX), the Deutsche Commercial Internet Exchange (DE-CIX) and the Amsterdam Internet Exchange (AMS-IX). We explore how ICT exerts two opposite eﬀects on agglomeration: a weakening of the centrifugal forces, due to the lessening of the isolation market power, and a redesigning of the barycentre of the centripetal forces, focusing agglomeration around virtual locations. Our empirical analysis of the bilateral peering decisions involving the ISPs connected with the LINX in London, the DE-CIX in Frankfurt and the AMS-IX in Amsterdam conﬁrms that peering is signiﬁcantly inﬂuenced by several elements: a major role seems to be played by the reputation eﬀects and knowledge between each other, the possibility of routing traﬃc to the destination network relatively soon, as well as the level of traﬃc imbalances...
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