The size, scale and multiple ownership of communication network
resources makes it important to consider an economic framework
wherein we can investigate the efficiency of network operation
taking agents' incentives into account. Such a framework has
been considered in the design and analysis of pricing mechanisms
to regulate congestion and share bandwidth over short time scales.
We consider time scales of a few months over which owners of
communication links lease bandwidth to network service providers.
As is well-known, economic efficiency is related to how close an
allocation is to a competitive equilibrium. We first show that
achieving economic efficiency through a market mechanism depends
on network topology. We then show that in finite networks a
competitive equilibrium may not exist. But a competitive equilibrium
does exist in an idealized continuum model, in which all agents
are infinitesimal compared with the size of the network. This
suggests that approximate competitive equilibria with good
performance may be attainable in real networks. We finally introduce
a market mechanism called the combinatorial seller's bid double
auction whose outcome, in the continuum model, is a competitive
equilibrium.