ISP Cost Research Articles

A two-sided model of paid peering

Internet users have suffered collateral damage in tussles over paid peering between large ISPs and large content providers. Paid peering is a relationship where two networks exchange traffic with payment, which provides direct access to each other’s customers without having to pay a third party to carry that traffic for them. The issue will arise again when the United States Federal Communications Commission (FCC) considers a new net neutrality order.We first consider the effect of paid peering on broadband prices. We adopt a two-sided market model in which an ISP maximizes profit by setting broadband prices and a paid peering price. We analytically derive the profit-maximizing prices, and show that they satisfy a generalization of the well-known Lerner rule. Our result shows that paid peering fees reduce the premium plan price, increase the video streaming price and the total price for premium tier customers who subscribe to video streaming services; however, the ISP passes on to its customers only a portion of the revenue from paid peering. ISP profit increases but video streaming profit decreases as an ISP moves from settlement-free peering to paid peering price.We next consider the effect of paid peering on consumer surplus. We find that consumer surplus is a uni-modal function of the paid peering fee. The paid peering fee that maximizes consumer surplus depends on elasticities of demand for broadband and for video streaming. However, consumer surplus is maximized when paid peering fees are significantly lower than those that maximize ISP profit. However, it does not follow that settlement-free peering is always the policy that maximizes consumer surplus. The peering price depends critically on the incremental ISP cost per video streaming subscriber; at different costs, it can be negative, zero, or positive.

The disparity between P2P overlays and ISP underlays: issues, existing solutions, and challenges

The proliferation of peer-to-peer applications has generated tremendous traffic in the Internet backbone and has also posed unprecedented pressure on Internet Service Providers. Many P2P applications, oblivious of underlying ISP networks, can lead to inefficient utilization of Internet resources and a significant amount of costly inter-ISP traffic. Recently, increasing efforts have been directed toward mitigating ISP costs from P2P applications while preserving the user perceived service quality. In this article we review state-of-the-art research on P2P applications with particular focus on their topological properties and navigating algorithms with awareness of ISP costs and performances. We discuss ISP-friendly designs in P2P applications by identifying their respective benefits and deficiencies. Based on the lessons we have learned, we further highlight future research challenges and issues regarding the joint design and optimization of P2P system performance and ISP traffic and costs.

Providing end-to-end service level agreements across multiple ISP networks

Due to the autonomous nature of ISPs, the service level agreement (SLA) offering is currently confined to within a single provider network. In this work, we examine some methods of extending the SLA offering across ISP boundaries. We introduce three policies to coordinate the end-to-end performance guarantee in multiple ISP networks: the least-effort, the most-effort, and the equal-distribution policies. These policies refer to different manners in which the service-level constraints are distributed among all transit networks. We study the impacts of these policies on the overall ISP community when SLA is required. We evaluate the effectiveness of these policies in terms of both the network performance and the ISPs monetary profit. The results show that the policy choice depends on the network load, as well as the ISP cost structure.