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 platform. Due to the best-effort service model of the Internet, the quality of service (QoS) of Internet services however cannot be guaranteed. Furthermore, characterizing QoS is challenging since it depends on the autonomous business decisions such as capacity planning, routing strategies and peering agreements of network providers. To quantify the QoS for Internet-based services, we regard the Internet infrastructure as a transport system for data packets and study the Internet ecosystem and the economics of transport services collectively provided by the autonomous network providers. In contrast to the traditional transport economics that studies the movement of people and goods over space and time, our focus in the Internet transport economics is the movement of streams of data packets that create information services. In particular, we model the supply of network capacities and demands of throughput driven by network protocols and establish a macroscopic network equilibrium under which both the end-to-end delays and drop rates of Internet routes can be derived. We show that this equilibrium solution always exists and its uniqueness can be guaranteed under various realistic 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.