Pricing in a Multiple ISP Environment with Delay Bounds and Varying Traffic Loads

Abstract

In this thesis, we study different Internet pricing schemes and how they can be applied to a multiple ISP environment. We first take a look at the current Internet architecture. Then the different classes that make up the Internet hierarchy are discussed. We also take a look at peering among Internet Service Providers (ISPs) and when it is a good idea for an ISP to consider peering. Moreover, advantages and disadvantages of peering are discussed along with speculations of the evolution of the Internet peering ecosystem. We then consider different pricing schemes that have been proposed and study the factors that make up a good pricing plan. Finally, we apply some game theoretical concepts to discuss how different ISPs could interact together. We choose a pricing model based on a Stackelberg game that takes into consideration the effect of the traffic variation among different customers in a multiple ISP environment. It allows customers to specify their desired QoS in terms of maximum allowable end-to-end delay. Customers only pay for the portion of traffic that meet this delay bound. Moreover, we show the effectiveness of adopting this model through a comparison with a model that does not take traffic variation into account. We also develop a naïve case and compare it to our more sophisticated approach.