Conference Agenda

Internet Exchange Points (IXPs) are critical Internet infrastructures that facilitate local traffic exchange between Internet Service Providers (ISPs) through various peering arrangements. We posit that peering can significantly impact telecommunications costs and market outcomes. This paper examines the economic costs of peering relative to IP Transit services and analyzes their downstream effects on telecommunications markets globally. Using a comprehensive dataset that combines publicly available peering port pricing data with proprietary IP Transit pricing information from 2019 to 2024, we demonstrate that peering costs are substantially lower than IP Transit costs. Our analysis reveals that greater cost savings from peering are associated with lower broadband prices for consumers, expanded mobile network coverage, and increased overall telecommunications revenues. The links between transit-peering price differentials and positive market outcomes are particularly pronounced in moderately regulated economies and low-to lower-middle-income countries, suggesting that developing economies may derive greater benefits from IXP development. These findings have important policy implications, indicating that governments should consider supporting IXP growth and implementing policies to help stakeholders understand peering costs. Our study provides the first direct comparison of peering and IP Transit pricing and explores the economy-wide implications of these decisions.