Contend delivery networks (CDN) are important players on the Internet. They provide services to
websites that improve the quality of service (QoS) and provide end users (EU) with a better
experience, i.e. faster loading web pages. CDNs can be seen as platforms that cater for two distinct
groups of customers. On the one side, they have content providers (CP), i.e. web sites; on the other
side they need to collaborate with Internet service providers (ISP) to reach EUs. We construct a
formal model that demonstrates the pricing decisions of ISPs and CDNs and contrast it to the
standard types of pricing Internet access and traffic. As a modelling tool we use theory on two-sided
markets and bottleneck platforms. We find that ISPs have relatively high market power and extract
profits from CDNs to compete for EUs.
Hau, Thorsten and Brenner, Walter, "Vertical Platform Interaction on the Internet: How ISPS and CDNS Interact" (2010). ECIS 2010 Proceedings. 114.