Time-Dependent Broadband Pricing: Feasibility and Benefits
Charging different prices for Internet access at different times induces users to spread out their bandwidth consumption across times of the day. Potential impact on ISP revenue, congestion management, and consumer behavior can be significant, yet some fundamental questions remain: is it feasible to operate time dependent pricing and how much benefit can it bring? The authors develop an efficient way to compute the cost-minimizing time-dependent prices for an Internet Service Provider (ISP), using both a static session-level model and a dynamic session model with stochastic arrivals. A key step is choosing the representation of the optimization problem so that the resulting formulations remain computationally tractable for large-scale problems.