Dynamic quality behavior of differential pricing and of service options for the internet

Peter C. Fishburn, Andrew M. Odlyzko

Research output: Chapter in Book/Report/Conference proceedingConference contribution

42 Scopus citations

Abstract

The simple model on which the Internet has operated, -with all packets treated equally, and charges only for access links to the network, has contributed to its explosive growth. However, there is wide dissatisfaction with the delays and losses in current transmission. Further, new services such as packet telephony require assurance of considerably bener service. These factors have stimulated the development of methods for providing Quality of Service (QoS), and this will make the Internet more complicated. Differential quality will also force differential pricing, and this will further increase the complexity of the system. The solution of simply putting in more capacity is widely regarded as impractical. However, it appears that we are about to enter a period of rapidly declining transmission costs. The implications of such an environment are explored by considering models with two types of demands for data transport, differing in sensitivity to congestion. Three network configurations are considered: (1) with separate networks for the two types of traffic, (2) with a single network that provides uniformly high QoS, and (3) with a single physical network that provides differential QoS. The best solution depends on the assumptions made about demand and technological progress. However, we show that the provision of uniformly high QoS to all traffic may well be best in the long run. Even when it is not the least expensive, the additional •costs it imposes are usually not large. In a dynamic environment of rapid growth in traffic and decreasing prices, these costs may well be worth paying to attain the simplicity of a single network that treats all packets equally and has a simple charging mechanism.

Original languageEnglish (US)
Title of host publicationProceedings of the 1st International Conference on Information and Computation Economies, ICE 1998
PublisherAssociation for Computing Machinery, Inc
Pages128-139
Number of pages12
ISBN (Electronic)1581130767, 9781581130768
DOIs
StatePublished - Oct 28 1998
Externally publishedYes
Event1st International Conference on Information and Computation Economies, ICE 1998 - Charleston, United States
Duration: Oct 25 1998Oct 28 1998

Publication series

NameProceedings of the 1st International Conference on Information and Computation Economies, ICE 1998

Other

Other1st International Conference on Information and Computation Economies, ICE 1998
CountryUnited States
CityCharleston
Period10/25/9810/28/98

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