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Recent measurements and anecdotal evidence indicate that the Internet ecosystem is rapidly evolving from a multi-tier hierarchy built mostly with transit (customer-provider) links to a dense mesh formed with mostly peering links. This transition can have major impact on the global Internet economy as well as on the traffic flow and topological structure of the Internet. In this paper, the authors study this evolutionary transition with an agent-based network formation model that captures key aspects of the interdomain ecosystem, viz., interdomain traffic flow and routing, provider and peer selection strategies, geographical constraints, and the economics of transit and peering interconnections.
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