Nash-Peering: A New Techno-Economic Framework for Internet Interconnections

Abstract: The current framework of Internet interconnections, based on transit and settlement-free peering relations, has systemic problems that often cause peering disputes. We propose a new techno-economic interconnection framework called Nash-Peering, which is based on the principles of Nash Bargaining in game theory and economics. Nash-Peering constitutes a radical departure from current interconnection practices, providing a broader and more economically efficient set of interdomain relations. In particular, the direction of payment is not determined by the direction of traffic or by rigid customer-provider relationships but based on which AS benefits more from the interconnection. We argue that Nash-Peering can address the root cause of various types of peering disputes.