A network formation model for internet transit relations

Most Autonomous Systems in the Internet need to select one or more transit providers. The provider selection process is complex, influenced by dynamic pricing, contracts, performance, marketing and other factors. We propose a simple dynamic model that captures the salient features of the provider selection process. The model creates a positive feedback effect, where "the bigger a provider is the bigger it gets". We then study the resulting internetwork formation process, showing that it always leads to a stable, but not unique, internetwork. We also use computational experiments to understand how the convergence delay scales with the size of the network, the factor(s) that affect the number of distinct equilibria, and the impact of three key model parameters.