Interaction of ISPs: Distributed Resource Allocation and Revenue Maximization

Abstract

The Internet is a hierarchical architecture comprising heterogeneous entities of privately owned infrastructures, where higher level Internet service providers (ISPs) supply connectivity to the local ISPs and charge the local ISPs for the transit services. One of the challenging problems facing service providers today is how to increase the profitability while maintaining good service qualities as the network scales up. In this work, we seek to understand the fundamental issues on the "interplay" (or interaction) between ISPs at different tiers. While the local ISPs (which we term peers) can communicate with each other by purchasing the connectivity from transit ISPs, there stands an opportunity for them to set up private peering relationships.Under this competitive framework, we explore the issues on (a) impact of peering relationship, (b) resource distribution, (c) revenue maximization, and (d) condition for network upgrade. Firstly, a generalized model is presented to characterize the behaviors of peers and the transit ISP, in which their economic interests are reflected. We study how a peer can distributively determine its optimal peering strategy. Furthermore, we show how a transit ISP is able to utilize the available information to infer its optimal pricing strategy, under which a revenue maximization is achieved. Two distributed algorithms are proposed to help ISPs to provide a fair and efficient bandwidth allocation to peers, avoiding a resource monopolization of the market.Last but not least, we investigate the above issues in a many-peers-region, i.e., when we scale up the network. We provide insightful evidence to show that the ISPs can still gain profits as they upgrade the network infrastructures. Extensive simulations are carried out to support our theoretical claims.

A Routing Strategy for Multihomed ISP to Mitigate the Impact of Overlay Traffic

“…We assume that the transmission delay of each link is represented by an M/M/1 model, and that the ISP uses the average latency of each link as the congestion metric. Here, we follow the latency cost model presented in [15] in which the latency of l i and its associated cost are given by 1 c i − f i and f i c i − f i , respectively. We then formulate the ISP's cost for l i as the weighted sum of the monetary and latency costs:…”

LBMP: A Logarithm-Barrier-Based Multipath Protocol for Internet Traffic Management

“…Multipath utility maximization appears naturally in many resource allocation problems in communication networks, such as the multipath flow control [7], the optimal quality-of-service(QoS) routing [5] [18] and the optimal network pricing [17].…”

On the Interaction and Competition among Internet Service Providers

“…Note that if we set C k i = 0, it implies that the lower tier ISP i is not connected to ISP k. Let n k be the number of lower tier ISPs buying connection service from the higher tier ISP k. We also denote G i as the set of higher tier ISPs in which the lower tier ISP i is buying connection service from, and H k as the set of lower tier ISPs in which the higher tier ISP k is providing connection service to. Note that this network model is a generalization of the network model in [12] wherein only a single higher tier ISP was considered (therefore, in [12], there is no competition among higher tier ISPs). Let x ij denote the traffic transmission rate (in unit of bps) from lower tier ISP i to lower tier ISP j.…”

“…With the estimate ofz k (P k ), one can easily calculate the profit of the higher tier ISP k by Eq. (12). Before we present the optimal price search method, let us first illustrate how a higher tier ISP k can estimate the aggregate bandwidth consumption with a fixed unit price P k .…”

“…The work also shows the revenue per unit bandwidth increases and overall performance of each user improves when the number of users increases. In [12], authors investigate the issues of revenue maximization and network scalability of ISP, where there is only one higher tier ISP. The work also show the rationale for an ISP to perform network upgrade.…”