What is Internet Balkanization

Since 1986, the Internet has developed into a global network enabling users worldwide to connect to each other to exchange information and data. The initial zero settlement peering arrangements, however, have now largely been replaced by commercial transit arrangements, as backbone providers seek to recoup their network infrastructure investments and generate commercial profits. This is a key cause of the issues and debates that have emerged between developed and developing countries about international Internet interconnection services (IIS). This study focuses on current interconnection settlement arrangement models that disfavor ISPs and end-users in the Asia-Pacific region. After reviewing the Internet market and digital divide in the region, the chapter summarizes the main current IIS issues between the Asia- Pacific and Western regions into three categories of concern: inequity, anticompetitive practices and the threat of the “balkanization” of the Internet. Practical recommendations to resolve these issues and improve the Asia-Pacific IIS market are discussed from regional and international perspectives.