Network Transmission and Storage: Vertical Relationships and Industry Structure
John Chung-I Chuang · 1999
Distance still matters over the Internet. Network storage services, such as caching and replication, are employed by network operators and publishers to bring data closer to their clients. This paper examines the vertical relationships between the nascent network storage services industry and the more established, but still continually evolving network transmission services industry. We find that significant technological and transactional efficiencies may be realized through the joint provisioning of network storage and transmission services. However, the benefits of vertical integration may be diminished, or even negated, if an integrated provider with market power in the transmission domain exercises it to foreclose competition in the storage domain. 1 1. Introduction Telecommunications policy has, historically, been shaped and governed by the unique economics of wires and switches. The construction of any telecommunications infrastructure requires huge, up-front capita...