Can ISPs be Profitable Without Violating Network Neutrality? Amogh Dhamdhere Constantine Dovrolis...

Can ISPs be Profitable Without Violating Network Neutrality?

Amogh DhamdhereConstantine Dovrolis

Georgia Tech

Amogh DhamdhereNetEcon 2008

Disclaimer

This is not a game theory talk


The Network Neutrality Debate

Recent Trend: Large amounts of video and peer-to-peer traffic on the Internet

Access Providers (AP) deliver content to users Recent trend: Not profitable Flat rates, commoditization of Internet access

Content providers (CP) generate the content Profitable (think Google)

Tension between AP and CPs: “Network neutrality” debate

Traffic shaping/prioritization by ISPs


A Technical View

Previous work Mostly non-technical Emotional debates in the press, painting APs as villians

But what about the underlying problem: Non-profitability of Access Providers?

Our approach: A quantitative look at AP profitability Investigate reasons for non-profitability Evaluate strategies for the AP to increase profit


Modeling AP Profitability

Three AS types: AP, CP and transit provider (TP)

Focus on the AP AS links

customer-provider (customer pays provider)

peering (no payments) AP and CPs can transfer

traffic either through customer-provider or peering links

TP TP

APAP

CPCPCP CP

CP

CP

CP

CP


Baseline model AP and CP connect to the TP as customers N users of AP, charged a flat rate R ($/month)

Flat rate prices decrease due to competition

Transit pricing: 95th percentile of traffic volume 95th / mean = 2:1 for normal traffic, 4:1 for video1

More video means higher transit payment by AP

AP users: Heavy tailed distribution of content downloaded per month

High variability in AP costs

1Norton’06: Internet Video: The Next Wave of Massive Disruption to the U.S. Peering Ecosystem


AP Strategies – Charging Charging strategies

AP charges “heavy hitters” according to volume downloaded

AP caps heavy hitters AP charges CP (non-network

neutral) Charging strategies are

disruptive AP users may depart,

depending on existing competition

Parameter d determines shape of departure probability curve

AP cannot control customer departure probability


AP Strategy – Charging Heavy Hitters

Threshold T to identify heavy downloaders

Charge “by volume” for heavy hitters

c(D) = D*R/T, where download amount D, threshold T, flat rate R

Customer departure probability depends on T and d

AP’s profit is sensitive to customer departure probability

For some values of d, no threshold gives larger profit than baseline !!


AP Strategies - Connection

Connection Strategies AP caches content from CPs AP peers selectively with CPs

Goal: Save transit costs paid to the transit provider Does not increase the AP’s revenue

Non-disruptive AP does not risk losing customers


AP Strategy – Cache CP Content AP caches content from

some CPs locally Saves transit costs, as

content is served locally Increases local costs

incurred by the AP Critical parameters:

Fraction of content that can be cached (h) and cost incurred for caching (s) Live content cannot be

cached! Profit is sensitive to h, s


AP Strategies – Peering with CPs

Peering selectively with Content Providers can save transit costs, without risk of losing its users

But, peering is not free Fixed, traffic dependent costs

Peering cost classes for CPs “Low”: CPs at the same geographical location/IXP “Medium”: CPs at nearby location/IXP “Hard”: CPs in different continents

Cost benefit analysis: r = Estimated benefit/Estimated Cost Peer if r > R


AP Strategies – Peering with CPs

Optimal point exists for the cost-benefit threshold R AP controls the factor R

Significant reduction in AP costs with selective peering

Greater benefit with fewer CPs (more traffic from the largest CPs)

AP can leverage expansion by large CPs


Conclusions

Network Neutrality research should also focus on the underlying problem: Non-profitability of ISPs

How can ISPs be profitable in spite of increasing traffic, heavy-hitter users and video traffic ?

Charging schemes that target heavy hitters may not work in the presence of competition in the AP market Profit highly sensitive to customer departure probability Out of the AP’s control

Connection strategies such as peering selectively with Content Providers seem promising Completely under the AP’s control


Thank You !


AP Strategy – Capping Heavy Hitters

AP caps download rate for users

Limits the total amount of traffic handled

Saves transit costs and local costs, but does not increase revenue

AP profit depends on customer departure probability

For some values of d, no threshold gives larger profit than baseline !!

No significant improvement over baseline


AP Strategy – Charging CPs

AP directly charges the top sources of content (CPs)

Increases revenue, but violates “network neutrality”

Subject to customer departure due to discriminatory practices

AP profit depends on customer departure probability

Can ISPs be Profitable Without Violating Network Neutrality? Amogh Dhamdhere Constantine Dovrolis...

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