Impact of the Backbone Network Market Structure on the ISP Competition

The network market shows a hierarchy of providers, with backbone providers and access providers. We aim in this paper at describing the economic relationships between those network providers, where content providers are associated to backbone providers while access providers compete to attract end users. We study those interactions thanks to game theory, using a multi-level game model. We analyze in addition the vertically integrated case, i.e., the situation when the backbone provider is also an access provider. We then discuss the impact of this analysis on the network neutrality debate, highlighting the importance of a regulation on prices charged by backbone to access providers.