A game–theoretic analysis of the implications of overlay network traffic on ISP peering

Abstract

a b s t r a c tInter-ISP traffic flow determines the settlement between ISPs and affects the perceived performance of ISP services. In today's Internet, the inter-ISP traffic flow patterns are controlled not only by ISPs' policy-based routing configuration and traffic engineering, but also by application layer routing. The goal of this paper is to study the economic implications of this shift in Internet traffic control assuming rational ISPs and subscribers. For this purpose, we build a general traffic model that predicts traffic patterns based on subscriber distribution and abstract traffic controls such as caching functions and performance sensitivity functions. We also build a game-theoretic model of subscribers picking ISPs, and ISPs making provisioning and peering decisions. In particular, we apply this to a local market where two ISPs compete for market share of subscribers under two traffic patterns: ''Web" and ''P2P overlay", that typifies the transition the current Internet is going through. Our methodology can be used to quantitatively demonstrate that (1) while economy of scale is the predominant property of the competitive ISP market, P2P traffic may introduce unfair distribution of peering benefit (i.e. free-riding); (2) the large ISP can restore more fairness by reducing its private capacity (bandwidth throttling), which has the drawback of hurting business growth; and (3) ISPs can reduce the level of peering (e.g. by reducing peering bandwidth) to restore more fairness, but this has the side-effect of also reducing the ISPs' collective bargaining power towards subscribers.

Two-stage stochastic equilibrium problems with equilibrium constraints: modeling and numerical schemes

“…Apart from the applications of the two stage SEPEC models discussed in this section, there are some potential applications in transportation and economics [15,21,13,28], internet service problems [36] and airline revenue management problems [16].…”

“…In a recent work, Koh [17] investigated the potential for implicit collusions between users in the traffic network, and obtained an EPEC model where every players are constrained by a variational inequality. EPEC models have also been used for a game-theoretic analysis of the implications of overlay networks traffic of internet service providers (ISP) in Wang, Chiu and Lui [36].…”

The Implications of Overlay Routing for ISPs' Peering Strategies

“…The network model is simple, but as it reflects some basic principles of transit and peering relationships, it is preferred to be used by researchers. The authors of [11] and [10] study the tussles between ISPs and P2P file-sharing applications with similar network models. Different from [11] and [10], we use this model to study overlay routing.…”

“…It is different from [10] and [11], because their focus is on P2P applications, while ours is on overlay routing traffic. This research is also different from [19], because they are concerned with the overlay routing applications side, while our work considers ISPs' connection decisions.…”

“…They propose simple models to represent P2P traffic demands, peering, and routing in a market place of two competing ISPs, and analyze the effectiveness of alternative peering and provisioning strategies available to ISPs. Wang et al [11] then extend their original model [10] to include more general P2P traffic models and the subscribers' choice process. They build a multi-leader-follower game-theoretic model of subscribers choosing ISPs, and the ISPs making provisioning and peering decisions.…”