The Internet is a global network of networks, numbering close to 90,000 by end of 2018, held together by millions of Internet interconnection agreements. These interconnection agreements can generally be classified as either peering or transit, although hybrids exist in between. Transit is usually a contract where one network pays an upstream network to deliver data traffic from its end users to the rest of the Internet while peering often involves two networks directly exchanging data traffic destined to each other without financial settlement.
There are recurring calls for government to intervene more widely and systematically in these Internet interconnection markets. Some governments are already mandating networks to peer at specified locations. However, analysis of whether government intervention will be effective or warranted requires deeper understanding of the conditions shaping the incentives of networks to interconnect. Unfortunately, there is a paucity of empirical research on Internet interconnection due partly to the opacity and confidentiality of these business relationships. The goal of this paper is to help contribute towards closing this knowledge gap by exploring the drivers of Internet interconnection between competing telecommunication carriers using network agreements inferred from open-source traceroute and Border Gateway Protocol (BGP) data.