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Pay as Your Service Needs: An Application-Driven Pricing Approach for the Internet Economics

Published: 09 November 2019 Publication History

Abstract

Various differentiated pricing schemes have been proposed for the Internet market. Aiming at replacing the traditional single-class pricing for better welfare, yet, researchers have shown that existing schemes can bring only marginal profit gain for the ISPs. In this article, we point out that a proper form of differentiated pricing for the Internet should not only consider congestion, but more importantly, it should provide application specific treatment to data delivery. Formally, we propose an “application-driven pricing” approach, where an ISP offers a number of service classes in terms of a guaranteed quality of service and announces a unit usage price for each class, and content providers are free to choose which class to use depending on the requirement of their applications. Unlike previous studies, we point out that the revenue gain of multi-class pricing under our scheme can be significant. This is because we capture important aspects of application heterogeneity and take the quality of service and price as control knobs. We identify key factors that impact the revenue gain and reveal fundamental understandings on when and why an application-driven multi-class pricing can significantly increase the revenue of ISPs.

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  1. Pay as Your Service Needs: An Application-Driven Pricing Approach for the Internet Economics

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      cover image ACM Transactions on Internet Technology
      ACM Transactions on Internet Technology  Volume 19, Issue 4
      Special Section on Trust and AI and Regular Papers
      November 2019
      201 pages
      ISSN:1533-5399
      EISSN:1557-6051
      DOI:10.1145/3362102
      • Editor:
      • Ling Liu
      Issue’s Table of Contents
      Permission to make digital or hard copies of all or part of this work for personal or classroom use is granted without fee provided that copies are not made or distributed for profit or commercial advantage and that copies bear this notice and the full citation on the first page. Copyrights for components of this work owned by others than ACM must be honored. Abstracting with credit is permitted. To copy otherwise, or republish, to post on servers or to redistribute to lists, requires prior specific permission and/or a fee. Request permissions from [email protected]

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      Publication History

      Published: 09 November 2019
      Accepted: 01 September 2019
      Revised: 01 August 2019
      Received: 01 March 2019
      Published in TOIT Volume 19, Issue 4

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      Author Tags

      1. Application driven pricing
      2. quality of service
      3. revenue maximization

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