Modeling Tiered Pricing in the Internet Transit Market

ISPs are increasingly selling "tiered" contracts, which offer Internet connectivity to wholesale customers in bundles, at rates based on the cost of the links that the traffic in the bundle is traversing. Although providers have already begun to implement and deploy tiered pricing contracts, little is known about how such pricing affects ISPs and their customers. While contracts that sell connectivity on finer granularities improve market efficiency, they are also more costly for ISPs to implement and more difficult for customers to understand. In this work we present two contributions: (1) we develop a novel way of mapping traffic and topology data to a demand and cost model; and (2) we fit this model on three large real-world networks: an European transit ISP, a content distribution network, and an academic research network, and run counterfactuals to evaluate the effects of different pricing strategies on both the ISP profit and the consumer surplus. We highlight three core findings. First, ISPs gain most of the profits with only three or four pricing tiers and likely have little incentive to increase granularity of pricing even further. Second, we show that consumer surplus follows closely, if not precisely, the increases in ISP profit with more pricing tiers. Finally, the common ISP practice of structuring tiered contracts according to the cost of carrying the traffic flows (e.g., offering a discount for traffic that is local) can be suboptimal and that dividing contracts based on both traffic demand and the cost of carrying it into only three or four tiers yields near-optimal profit for the ISP

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

Subsidization Competition: Vitalizing the Neutral Internet

Unlike telephone operators, which pay termination fees to reach the users of another network, Internet Content Providers (CPs) do not pay the Internet Service Providers (ISPs) of users they reach. While the consequent cross subsidization to CPs has nurtured content innovations at the edge of the Internet, it reduces the investment incentives for the access ISPs to expand capacity. As potential charges for terminating CPs' traffic are criticized under the net neutrality debate, we propose to allow CPs to voluntarily subsidize the usagebased fees induced by their content traffic for end-users. We model the regulated subsidization competition among CPs under a neutral network and show how deregulation of subsidization could increase an access ISP's utilization and revenue, strengthening its investment incentives. Although the competition might harm certain CPs, we find that the main cause comes from high access prices rather than the existence of subsidization. Our results suggest that subsidization competition will increase the competitiveness and welfare of the Internet content market; however, regulators might need to regulate access prices if the access ISP market is not competitive enough. We envision that subsidization competition could become a viable model for the future Internet

A model of network neutrality with usage-based prices

Available electronicallyby Springer since 2011International audienceHahn and Wallsten [7] 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 for the content provider and consider both cooperative and non-cooperative scenarios. In particular, we model the: impact of side-payments between service and content providers, consider an access provider that offers multiple service classes, and model leader-follower (Stackelberg game) dynamics. We finally study the additional option for one provider to determine the amount of side payment from the other provider. We show that not only do the content provider and the internaut suffer, but also the Access Provider's performance degrades

가상 네트워크의 자원 할당, 가격 결정 및 고장 관리

학위논문 (박사)-- 서울대학교 대학원 : 전기·컴퓨터공학부, 2013. 8. 서승우.네트워크 가상화는 물리적 네트워크의 공유 자원들을 복수 개의 가상 네트워크들에 동적으로 할당할 수 있게 해주는 기술이다. 자원 할당의 유연성과 가상 네트워크들 사이의 독립성 때문에, 네트워크 가상화는 네트워크 테스트베드를 설계하기 위한 기반 기술로써 주로 활용되어 왔을 뿐만 아니라, 인터넷의 다양화를 지원하기 위한 비용 효율 높은 해결책으로써 여겨지기 시작했다. 서비스에 따라 계층화된 인터넷을 설계하기 위한 하나의 수단으로써, 네트워크 가상화는 여전히 해결해야 할 많은 도전 과제들을 가지고 있다. 이 학위 논문은 가상 네트워크 환경에서 중요한 몇 가지 새로운 연구 주제들을 제시하고, 그에 대한 효과적인 해법들을 제안한다. 첫 번째로, 가상 네트워크의 다양한 QoS 요구사항을 만족시킬 수 있는 네트워크 최적 분할 방법을 제안한다. QoS와 대역폭 제한 조건을 고려하여 가상 네트워크 분할 문제를 최적화 문제로 모형화하고, 문제의 구조적 복잡성을 해결하기 위해 최단 경로 라우팅에 기반한 휴리스틱을 제안한다. 실제 인터넷 환경을 고려한 대규모 실험을 통해, 제안한 휴리스틱의 효율성과 확장성을 입증한다. 다음으로, 가상 네트워크에서 차등 접속 서비스를 위한 경제성 분석 모델을 제시한다. 먼저 사용자 가입 변동 모형이 한 값으로 수렴하기 위한 충분 조건을 유도하고, 이러한 조건 하에서 인터넷 서비스 제공자의 수익을 최대화할 수 있는 최적의 가격 결정 방법 및 대역폭 분할 방법을 찾는다. 수치 실험을 통해, 적절한 가격 결정과 대역폭 분할이 이루어진다는 가정 하에서 차등화 서비스가 단일 서비스보다 더 높은 수익성을 나타낼 수 있음을 증명한다. 마지막으로, 가상 네트워크 간 트래픽 전환을 통한 빠르고 효과적인 고장 회복 기술을 개발한다. 가상 네트워크의 구조적 특성을 활용한 고장 회복 기술을 이용하면, 모든 링크에 대한 백업 경로가 항상 존재하도록 미리 토폴로지를 설계해야 할 필요가 없고, 각 라우터에서 그 경로들에 대한 계산을 미리 해 놓을 필요가 없다. 그럼에도 불구하고, 제안한 고장 회복 방법은 기존의 기술들과 같은 좋은 성능을 보인다. 이 학위 논문은 가상 네트워크를 기반으로 하는 인터넷 환경에서 발생할 수 있는 중요한 문제들을 다루고자 한다. 이 논문에서 제안하는 분석 모델 및 실험 결과들은 현재 인터넷의 한계를 극복하고, 미래 인터넷 아키텍처를 설계하기 위한 유용한 지침을 제공할 것이다.Network virtualization is an emerging technology that enables the dynamic partitioning of a shared physical network infrastructure into multiple virtual networks. Because of its flexibility in resource allocation and independency among virtual networks, the network virtualization technology has not only been mainly deployed to build a testbed network, but also has come to be regarded as a cost-effective solution for diversifying the Internet. As a means of building the multi-layered Internet, network virtualization still faces a number of challenging issues that need to be addressed. This dissertation deals with several important research topics and provides effective solutions in network virtualization environment. First, I focus on the optimal partitioning of finite substrate resources for satisfying the diverse QoS requirements of virtual networks. I formulate virtual network partitioning problem as a mixed integer multi-commodity flow problem. Then, to tackle the structural complexity of the problem, I propose a simple heuristic based on shortest path routing algorithm. By conducting large-scale network experiments, I verify the efficiency and scalability of the heuristic. Next, I propose an economic model for tiered access service in virtual networks in order to remedy the deficiency of the existing tiered service schemes. I first derive a sufficient condition for stability of user subscription dynamics, and find the optimal pricing and capacity partitioning by addressing the revenue maximization problem of the tiered access service in a network virtualization environment. Numerical results show that the tiered service can be more profitable than the non-tiered service under proper pricing and capacity partitioning conditions. Last, I develop a fast and effective failure recovery mechanism through inter-virtual network traffic switching in virtual networks. The proposed failure recovery mechanism neither has topological constraints for the existence of backup paths, nor requires the pre-computation of them, but nevertheless guarantees as fast recovery as the existing failure recovery methods. This dissertation aims to address important issues in the virtual network-based Internet. I believe that the analysis and results in this dissertation will provide useful guidelines to improve the Internet.1 Introduction 1.1 Background and Motivation 1.2 Contributions and Outline of the Dissertation 2 Effective Partitioning for Service Level Differentiation in Virtual Networks 2.1 Introduction 2.2 Related Work 2.3 Model and Assumption 2.3.1 Business Model 2.3.2 Network Model 2.3.3 Traffic Demands 2.3.4 QoS Metric 2.4 Formulation 2.4.1 Objective 2.4.2 Substrate Partitioning Problem 2.4.3 Decomposition 2.5 Heuristic 2.6 Evaluation 2.6.1 Small Network Experiment 2.6.2 Large Network Experiment 2.7 Summary 3 Optimal Pricing and Capacity Partitioning for Tiered Access Service in Virtual Networks 3.1 Introduction 3.2 Motivating Example 3.3 A Tiered Service Model 3.3.1 Network Virtualization Environment 3.3.2 Effective Access Rate 3.3.3 Valuation Parameter and User Utility 3.3.4 User Subscription and the ISP Revenue 3.4 Non-tiered Service Analysis 3.4.1 User Subscription Dynamics 3.4.2 Optimal Pricing for Maximizing the ISP Revenue 3.5 Tiered Service Analysis 3.5.1 User Subscription Dynamics 3.5.2 Convergence of the User Subscription Dynamics 3.5.3 Optimal Pricing for Maximizing the ISP Revenue 3.6 Numerical Results 3.6.1 Non-tiered Service Example 3.6.2 Tiered Service Example 3.7 Related Work and Discussion 3.8 Summary 4 Inter-Virtual Network Traffic Switching for Fast Failure Recovery 4.1 Introduction 4.2 Background 4.3 Preliminaries 4.3.1 Virtual Network Model 4.3.2 Design Goals 4.3.3 Business Models and Switching Policy Agreement 4.3.4 Other Considerations 4.4 Failure Recovery based on Traffic Switching 4.4.1 Inter-VN Traffic Switching 4.4.2 Failure Recovery Process 4.5 Numerical Analysis 4.5.1 Delay 4.5.2 Congestion probability 4.6 Summary 5 Conclusion A Proofs of Lemmas A.1 Proof of Lemma 2 A.2 Proof of Lemma 3Docto

Costs and benefits of superfast broadband in the UK

This paper was commissioned from LSE Enterprise by Convergys Smart Revenue Solutions to stimulate an open and constructive debate among the main stakeholders about the balance between the costs, the revenues, and the societal benefits of ‘superfast’ broadband. The intent has been to analyse the available facts and to propose wider perspectives on economic and social interactions. The paper has two parts: one concentrates on superfast broadband deployment and the associated economic and social implications (for the UK and its service providers), and the other considers alternative social science approaches to these implications. Both parts consider the potential contribution of smart solutions to superfast broadband provision and use. Whereas Part I takes the “national perspective” and the “service provider perspective”, which deal with the implications of superfast broadband for the UK and for service providers, Part II views matters in other ways, particularly by looking at how to realise values beyond the market economy, such as those inherent in neighbourliness, trust and democrac

SLA Establishment with Guaranteed QoS in the Interdomain Network: A Stock Model

The new model that we present in this paper is introduced in the context of guaranteed QoS and resources management in the inter-domain routing framework. This model, called the stock model, is based on a reverse cascade approach and is applied in a distributed context. So transit providers have to learn the right capacities to buy and to stock and, therefore learning theory is applied through an iterative process. We show that transit providers manage to learn how to strategically choose their capacities on each route in order to maximize their benefits, despite the very incomplete information. Finally, we provide and analyse some simulation results given by the application of the model in a simple case where the model quickly converges to a stable state.Comment: 19 pages, 19 figures, IJCNC, http://airccse.org/journal/cnc/0711cnc13.pd