NeTS: Small: Innovating Internet Access Pricing: From Theory to Deployment

Princeton University, Princeton NJ

Investigators

Abstract

There has been no shortage of headline news on Internet access pricing in 2010 and 2011. From AT&T and Verizon shifting to usage-based pricing for wireless access to FCC's revealing the National Broadband Plan, and from Comcast-Netflix/Level3 battle on two-sided pricing to FCC's 2010 December statement on pricing innovations, the Internet is witnessing the start of a transformative period in the interplay between access pricing and the technology of networking. The technical core of this project is organized around four fundamental questions: (1) How much to charge? The debate between flat-rate and usage-based pricing renews with fresh perspectives. (2) How to charge? Should the price charged depend on the time of bandwidth consumption or congestion condition of the network? (3) Whom to charge? When will content/application producers find incentives to pay for higher data rate or heavier bandwidth consumption by consumers? (4) What to charge? What kind of new service classes can be invented, especially in heterogeneous wireless networks with multiple platforms co-existing? The unique features of this project include extensive participation from diverse sectors in the networking industry, implementation of prototypes and trials, and access to and dissemination of data. It combines the collection of fresh, large-volume of empirical data with rigorous design and prototype implementation. The project goes all the way from data analysis through optimization algorithms, to proof-of-concept demos and trials, eventually to practical impact on public policy and ISP business decisions, thus closing the loop in the study of network pricing. Intellectual Merits: While we sharpen and apply a variety of tools from optimization theory, microeconomics, game theory, and statistics, the challenges arising out of these social issues also demand the development of new methodologies, such as supply chain contracts for multi-platform, two-sided pricing with conflicting interests of content providers and Internet service providers (ISPs). Furthermore, the interactions between technology evolution and economic policies are mutual: new enabling technologies such as femtocell raises new questions on the interaction between engineering artifacts and pricing structures. Broader Impacts: The proposal is driven by timely and important questions faced by policy-makers, networking industry, and broadband consumers: (1) Who will pay for the estimated cost of $350B in the next decade to enable universal coverage of broadband services in this country? (2) Can pricing mechanisms be leveraged by the ISP as a practical approach to network management and new service class be created that is net-neutrality compatible? (3) How to regulate the nonstop surge of bandwidth demand to create win-win for both the ISPs and consumers? Furthermore, the project presents unique opportunities for undergraduate curriculum development, extensive industry participation and impact, and unconventional community outreach, both within US and across the world.