Paid Peering and Content Delivery

Recent conflicts between big content and service providers (CSPs) like Netflix, transit providers (TPs), and Internet service providers (ISPs) have generated considerate media attention and ignited a debate on interconnection agreements, market power of last-mile ISPs and net neutrality. We propose an experimental design to analyze a stylized interconnection market that captures key aspects of actual interconnection markets with a focus on the entry of big CSPs. Participants are invited to assume the roles of ISPs, TPs and CSPs in a computer-aided laboratory experiment. The experiment serves to evaluate potential regulatory tools like transparency and interconnection obligation with respect to the efficiency of the overall interconnection market. Furthermore, we present results of a pre-test of the experimental design and the software implementation. Our preliminary results indicate that operators underinvest into network infrastructure and do not realize the full potential of mutual peering agreements when a CSP participates in the market

Paid Peering, Settlement-Free Peering, or Both?

With the rapid growth of congestion-sensitive and data-intensive applications, traditional settlement-free peering agreements with best-effort delivery often do not meet the QoS requirements of content providers (CPs). Meanwhile, Internet access providers (IAPs) feel that revenues from end-users are not sufficient to recoup the upgrade costs of network infrastructures. Consequently, some IAPs have begun to offer CPs a new type of peering agreement, called paid peering, under which they provide CPs with better data delivery quality for a fee. In this paper, we model a network platform where an IAP makes decisions on the peering types offered to CPs and the prices charged to CPs and end-users. We study the optimal peering schemes for the IAP, i.e., to offer CPs both the paid and settlement-free peering to choose from or only one of them, as the objective is profit or welfare maximization. Our results show that 1) the IAP should always offer the paid and settlement-free peering under the profit-optimal and welfare-optimal schemes, respectively, 2) whether to simultaneously offer the other peering type is largely driven by the type of data traffic, e.g., text or video, and 3) regulators might want to encourage the IAP to allocate more network capacity to the settlement-free peering for increasing user welfare

Innovations in the Internet’s Architecture that Challenge the Status Quo

The current debate over broadband policy has largely overlooked a number of changes to the architecture of the Internet that have caused the price paid by and quality of service received by traffic traveling across the Internet to vary widely. Topological innovations, such as private peering, multihoming, secondary peering, server farms, and content delivery networks, have caused the Internet’s traditionally hierarchical architecture to be replaced by one that is more heterogeneous. Moreover, network providers have begun to employ an increasingly varied array of business arrangements. Some of these innovations are responses to the growing importance of peer-to-peer technologies. Others, such as paid peering and partial transit, are driven by the growing dominance of advertising-based business models as well as the insights provided by the economics of two-sided markets. At times interpreted as network providers’ attempts to promote their self interest at the expense of the public, these changes often reflect network providers’ attempts to reduce cost, manage congestion, and maintain quality of service. As such, they have the potential to yield substantial benefits both to individual consumers and to society as a whole

The Growing Complexity of Internet Interconnection

End-to-End (E2E) packet delivery in the Internet is achieved through a system of interconnections between heterogeneous entities called Autonomous Systems (ASes). The initial pattern of AS interconnection in the Internet was relatively simple, involving mainly ISPs with a balanced mixture of inbound and outbound traffic. Changing market conditions and industrial organization of the Internet have jointly forced interconnections and associated contracts to become significantly more diverse and complex. The diversity of interconnection contracts is significant because efficient allocation of costs and revenues across the Internet value chain impacts the profitability of the industry. Not surprisingly, the challenges of recovering the fixed and usage-sensitive costs of network transport give rise to more complex settlements mechanisms than the simple bifurcated (transit and peering) model described in many earlier analyses of Internet interconnection (see BESEN et al., 2001; GREENSTEIN, 2005; or LAFFONT et al., 2003). In the following, we provide insight into recent operational developments, explaining why interconnection in the Internet has become more complex, the nature of interconnection bargaining processes, the implications for cost/revenue allocation and hence interconnection incentives, and what this means for public policy. This paper offers an abbreviated version of the original paper (see FARATIN et al., 2007b).internet interconnection, economics, public policy, routing, peering.

The State of Network Neutrality Regulation

The Network Neutrality (NN) debate refers to the battle over the design of a regulatory framework for preserving the Internet as a public network and open innovation platform. Fueled by concerns that broadband access service providers might abuse network management to discriminate against third party providers (e.g., content or application providers), policymakers have struggled with designing rules that would protect the Internet from unreasonable network management practices. In this article, we provide an overview of the history of the debate in the U.S. and the EU and highlight the challenges that will confront network engineers designing and operating networks as the debate continues to evolve.BMBF, 16DII111, Verbundprojekt: Weizenbaum-Institut für die vernetzte Gesellschaft - Das Deutsche Internet-Institut; Teilvorhaben: Wissenschaftszentrum Berlin für Sozialforschung (WZB)EC/H2020/679158/EU/Resolving the Tussle in the Internet: Mapping, Architecture, and Policy Making/ResolutioNe

Network Neutrality or Internet Innovation?

Over the past two decades, the Internet has undergone an extensive re-ordering of its topology that has resulted in increased variation in the price and quality of its services. Innovations such as private peering, multihoming, secondary peering, server farms, and content delivery networks have caused the Internet’s traditionally hierarchical architecture to be replaced by one that is more heterogeneous. Relatedly, network providers have begun to employ an increasingly varied array of business arrangements and pricing. This variation has been interpreted by some as network providers attempting to promote their self interest at the expense of the public. In fact, these changes reflect network providers’ attempts to reduce cost, manage congestion, and maintain quality of service. Current policy proposals to constrain this variation risk harming these beneficial developments.

Cost-aware caching: optimizing cache provisioning and object placement in ICN

Caching is frequently used by Internet Service Providers as a viable technique to reduce the latency perceived by end users, while jointly offloading network traffic. While the cache hit-ratio is generally considered in the literature as the dominant performance metric for such type of systems, in this paper we argue that a critical missing piece has so far been neglected. Adopting a radically different perspective, in this paper we explicitly account for the cost of content retrieval, i.e. the cost associated to the external bandwidth needed by an ISP to retrieve the contents requested by its customers. Interestingly, we discover that classical cache provisioning techniques that maximize cache efficiency (i.e., the hit-ratio), lead to suboptimal solutions with higher overall cost. To show this mismatch, we propose two optimization models that either minimize the overall costs or maximize the hit-ratio, jointly providing cache sizing, object placement and path selection. We formulate a polynomial-time greedy algorithm to solve the two problems and analytically prove its optimality. We provide numerical results and show that significant cost savings are attainable via a cost-aware design