Alternative revenue sources for Internet service providers

The Internet has evolved from a small research network towards a large globally interconnected network. The deregulation of the Internet attracted commercial entities to provide various network and application services for profit. While Internet Service Providers (ISPs) offer network connectivity services, Content Service Providers (CSPs) offer online contents and application services. Further, the ISPs that provide transit services to other ISPs and CSPs are known as transit ISPs. The ISPs that provide Internet connections to end users are known as access ISPs. Though without a central regulatory body for governing, the Internet is growing through complex economic cooperation between service providers that also compete with each other for revenues. Currently, CSPs derive high revenues from online advertising that increase with content popularity. On other hand, ISPs face low transit revenues, caused by persistent declines in per-unit traffic prices, and rising network costs fueled by increasing traffic volumes. In this thesis, we analyze various approaches by ISPs for sustaining their network infrastructures by earning extra revenues. First, we study the economics of traffic attraction by ISPs to boost transit revenues. This study demonstrates that traffic attraction and reaction to it redistribute traffic on links between Autonomous Systems (ASes) and create camps of winning, losing and neutral ASes with respect to changes in transit payments. Despite various countermeasures by losing ASes, the traffic attraction remains effective unless ASes from the winning camp cooperate with the losing ASes. While our study shows that traffic attraction has a solid potential to increase revenues for transit ISPs, this source of revenues might have negative reputation and legal consequences for the ISPs. Next, we look at hosting as an alternative source of revenues and examine hosting of online contents by transit ISPs. Using real Internet-scale measurements, this work reports a pervasive trend of content hosting throughout the transit hierarchy, validating the hosting as a prominent source of revenues for transit ISPs. In our final work, we consider a model where access ISPs derive extra revenues from online advertisements (ads). Our analysis demonstrates that the ad-based revenue model opens a significant revenue potential for access ISPs, suggesting its economic viability.This work has been supported by IMDEA Networks Institute.Programa Oficial de Doctorado en Ingeniería TelemáticaPresidente: Jordi Domingo-Pascual.- Vocal: Víctor López Álvarez.-Secretario: Alberto García Martíne

A Study of Non-Neutral Networks with Usage-based Prices

Hahn and Wallsten wrote that network neutrality "usually means that broadband service providers charge consumers only once for Internet access, do not favor one content provider over another, and do not charge content providers for sending information over broadband lines to end users." In this paper we study the implications of non-neutral behaviors under a simple model of linear demand-response to usage-based prices. We take into account advertising revenues and consider both cooperative and non-cooperative scenarios. In particular, we model the impact of side-payments between service and content providers. We also consider the effect of service discrimination by access providers, as well as an extension of our model to non-monopolistic content providers

Power-Law Distributions in a Two-sided Market and Net Neutrality

"Net neutrality" often refers to the policy dictating that an Internet service provider (ISP) cannot charge content providers (CPs) for delivering their content to consumers. Many past quantitative models designed to determine whether net neutrality is a good idea have been rather equivocal in their conclusions. Here we propose a very simple two-sided market model, in which the types of the consumers and the CPs are {\em power-law distributed} --- a kind of distribution known to often arise precisely in connection with Internet-related phenomena. We derive mostly analytical, closed-form results for several regimes: (a) Net neutrality, (b) social optimum, (c) maximum revenue by the ISP, or (d) maximum ISP revenue under quality differentiation. One unexpected conclusion is that (a) and (b) will differ significantly, unless average CP productivity is very high

European Law and Regulation of Mobile Net Neutrality

Mobile is a rapidly growing and potentially major element of the future Internet, and its environment cannot be sensibly considered in isolation from fixed networks [2]. A note on terminology: Europe uses the term Mobile Network Operators (MNOs) while the United States uses 'wireless' Internet Service Providers (ISPs) [3]. 'Wireless' is somewhat more open in the United States. In Europe, mobile has always made special pleading for forms of self-regulation, as we will see. The article introduces mobile broadband, then considers net neutrality in the fixed environment including the new laws passed in November 2009 in the European Parliament, before considering the mobile net neutrality debate, the degree of price control regulation exerted on European mobiles and the MNOs' vigorous rear-guard anti-regulation defence. Finally, I look at the effects of this regulatory asymmetry and whether MNO calls for mobile to be treated differently from other ISPs can be justified. I conclude by examining what the effect of price and content control on mobile is likely to be for incentives for fixed ISPs and produce a result that I describe as the 'fixed' strategy

Paving the way to e-services: Innovation through online games

The transformative power of organizational and service innovations on value or supply chains has been the object of several studies. The question identified in this paper is how disruptive trends in the videogames world can have spill-over effects in the broader realm of e-services. Section 1 opens with a brief review of literature. Section 2 proposes a description of the on-line games industrial ecosystem, the characteristics of the production process and the value chain in the online video games industry. The main techno-economic models for the production and distribution of online games are described in a third section with an emphasis on service creation, and illustrated by some case studies. The last part highlights the trend of innovative paths towards an economy of e-Services which are driven by the evolution of online games in a converged environment. --Online value creation,virtual world,virtual good,value chain,digital content convergence,new business models,services

Governing the "New Economy": a 3-Phase Historical Model of Cumulative Gales of Creative Destruction of the United Kingdom Internet Service Providers' Market

This article documents the industrial dynamics and the innovation processes inherent in the fast emerging dial-up Internet access segment of the new telecommunication sector in the United Kingdom for the period between 1992 - 2002. It shows that evolving market structures and related products and service innovation in the wholesale and retail branches of the UK Internet Service Providers' market have to be understood in the context of: a) an entrepreneurial thrust that seizes the advantage of a glut of finance accumulated from the privatization of the utilities; b) the evolution of the relationship between the UK voice and data transfer markets after the privatization of British Telecommunications and the strategic development of its 'intelligent network'; c) the related network technologies and services available for deployment at the start of the implementation of the Internet as a mass infrastructure; d) BT's quasi-monopoly in call origination and finally e) the wider evolutionary industrial dynamics, i.e. a cumulative process of conjectures and feedback loops of market power, strategic management and transformation in corporate and institutional governance following the market's expansion and the transition from metered to unmetered dial up Internet access.innovation and industrial dynamics, dial-up Internet, United Kingdom