Internet Transport Economics: Model and Analysis

Abstract

With the rise of video streaming and cloud services, the Internet has evolved into a content-centric service network; however, quality of service (QoS) is still a major concern for the content providers. Because quality degradation is influenced by 1) the capacities of links along the routes used for content delivery and 2) the amount of competing traffic across these links, it is very difficult to diagnose.

In this paper, we establish a novel model to study how business decisions such as capacity planning, routing strategies and peering agreements affect QoS in terms of the end-to-end delays and drop rates of Internet routes. In particular, we take an economics perspective of the Internet transport service and model its supply of network capacities and demands of throughput driven by network protocols. We show that a macroscopic network equilibrium always exists and its uniqueness can be guaranteed under various scenarios. We analyze the impacts of user demands and resource capacities on the network equilibrium and provide implications of Netflix-Comcast type of peering on the QoS of users. We demonstrate that our framework can be used as a building block to understand the routing strategies under a Wardrop equilibrium and to enable further studies such as Internet peering and in-network caching.