Revenue Sharing in a Soft-Neutral Regime

Abstract

We consider the problem of revenue sharing contracts between Content Providers (CPs) to a common Internet Service Provider (ISP). Under the contract, the ISP makes investment decisions to improve network infrastructure that in turn improves the quality of service for the end-users. Such contracts are studied under the neutral and non-neutral regime where it is observed that the neutral regime yields lower social utility though it is preferred from the point of view of making the Internet a level platform for CPs of all 'size.' In this work, we propose a soft-neutral regime for revenue sharing in the Moral Hazard framework that alleviates the loss in social utility in the neutral regime. The 'softness' of the regime is parametrized by a single variable and spans the neutral and the non-neutral regime as we vary it between two extremes. We evaluate the social utility in the soft neutral regime and show its improvements over the neutral regime.