Pricing and Revenue Sharing Strategies for Internet Service Providers

Date Added: Jan 2012
Format: PDF

One of the challenges facing the networking industry today is to increase the profitability of Internet services. This calls for economic mechanisms that can enable providers to charge more for better services and collect a fair share of the increased revenues. In this paper, the authors present a generic model for pricing Internet services that are jointly offered by a group of providers. They show that non-cooperative pricing strategies between providers may lead to unfair distribution of profit and may even discourage future upgrades to the network. As an alternative, they propose a fair revenue-sharing policy based on the weighted proportional fairness criterion.