Telecommunications:

Characteristics and Competitiveness of the Internet Backbone Market

GAO-02-16: Published: Oct 16, 2001. Publicly Released: Nov 13, 2001.

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Although most Americans are familiar with Internet service providers that give consumers a pathway, or "on-ramp," to the Internet, few are familiar with Internet backbone providers and backbone networks. At the Internet's core are many high-capacity, long-haul "backbone" networks that route data traffic over long distances using high-speed fiber lines. Internet backbone providers compete in the marketplace and cooperate in the exchange of data traffic. The cooperative exchange of traffic among backbone providers is essential if the Internet is to remain a seamless and widely accessible public medium. Interconnection among Internet backbone providers varies both in terms of the physical structure and financial agreements of data traffic exchange. The physical structure of interconnection takes two forms: (1) the exchange of traffic among many backbone providers at a "network access point"--a common facility--and (2) the exchange of traffic between two or more backbone providers at "private" interconnection points. No publicly available data exist with which to evaluate competitiveness in the Internet backbone market. Evolution of this market is likely to be largely affected by two types of emerging services. First, demand is likely to rise for time-sensitive applications, such as Internet voice systems. Second, more "broadband"--bandwidth-sensitive--content, such as video, will likely flow over the Internet in the coming years.

Recommendation for Executive Action

  1. Status: Closed - Not Implemented

    Comments: In its 4th inquiry under Sec. 706 of the 1996 Telecommunications Act, FCC sought comment on GAO's recommendation that the Commission should evaluate whether there is adequate data available for the Commission to monitor the characteristics and trends in the Internet Backbone Market. Because no comments were submitted in response to that question, FCC is not pursuing any additional data collection on Internet Backbone Providers or their operations at this time.

    Recommendation: The Federal Communications Commission (FCC) should develop a strategy for periodically evaluating whether existing informal and experimental methods of data collection are providing the information needed to monitor the essential characteristics and trends of the Internet backbone market and the potential effects of the convergence of communications services. If a more formal data collection program is deemed appropriate, FCC should exercise its authority to establish such a program.

    Agency Affected: Federal Communications Commission

 

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