The economics of quality sponsored data in wireless networks

The growing demand for data has driven the Service Providers (SPs) to provide differential treatment of traffic to generate additional revenue streams from Content Providers (CPs). While SPs currently only provide best-effort services to their CPs, it is plausible to envision a model in near future, where CPs are willing to sponsor quality of service for their content in exchange of sharing a portion of their profit with SPs. In this paper, we introduce the problem of Quality-Sponsored Data (QSD) in cellular networks and study its implications on market entities in various scenarios. The direct coupling between the scarce wireless resources and the market decisions resulting from QSD is taken into account. In our model, SPs make a portion of their resources available for sponsorship by CPs, and price it appropriately to maximize their payoff, which depends on the monetary revenue and the satisfaction of end-users both for the non-sponsored and sponsored content, while CPs generate revenue through advertisement. We analyze the market dynamics and equilibria, and provide strategies for (i) SPs: to determine if and how to price resources, and (ii) CPs: to determine if and what quality to sponsor. We also discuss about the effects of different parameters of the model on market dynamics.

[1]  Benjamin E. Hermalin,et al.  The Economics of Product-Line Restrictions with an Application to the Network Neutrality Debate , 2007 .

[2]  George Kesidis,et al.  Migration to a non-neutral internet: Economics modeling and analysis of impact , 2016, 2016 Annual Conference on Information Science and Systems (CISS).

[3]  George Kesidis,et al.  Network NonNeutrality on the Internet: Content Provision Under a Subscription Revenue Model , 2014, PERV.

[4]  A. Robert Calderbank,et al.  Network Pricing and Rate Allocation with Content Provider Participation , 2009, IEEE INFOCOM 2009.

[5]  Sangtae Ha,et al.  TUBE: time-dependent pricing for mobile data , 2012, SIGCOMM '12.

[6]  George Kesidis,et al.  Market-based power allocation for a differentially priced FDMA system , 2014, 2014 IEEE International Symposium on Information Theory.

[7]  Florian Schutt.  Network Neutrality: A Survey of the Economic Literature , 2010 .

[8]  Sangtae Ha,et al.  A survey of smart data pricing , 2012, ACM Comput. Surv..

[9]  A. Mas-Colell,et al.  Microeconomic Theory , 1995 .

[10]  Hyoseop Lee,et al.  Calculating the benefits of sponsored data for an individual content provider , 2014, 2014 48th Annual Conference on Information Sciences and Systems (CISS).

[11]  Dan Wang,et al.  Sponsoring content: Motivation and pitfalls for content service providers , 2014, 2014 IEEE Conference on Computer Communications Workshops (INFOCOM WKSHPS).

[12]  A. Rubinstein,et al.  Bargaining and Markets , 1991 .

[13]  P. Dasgupta,et al.  The Economics of Bargaining , 1990 .

[14]  Asuman Ozdaglar,et al.  Date : July 16 , 2010 Investment in Two Sided Markets and the Net Neutrality Debate , 2010 .

[15]  Qiong Wang,et al.  Economic models of sponsored content in wireless networks with uncertain demand , 2013, 2013 IEEE Conference on Computer Communications Workshops (INFOCOM WKSHPS).

[16]  N. Economides,et al.  Network Neutrality on the Internet: A Two-Sided Market Analysis , 2012 .

[17]  Sangtae Ha,et al.  Sponsoring mobile data: An economic analysis of the impact on users and content providers , 2015, 2015 IEEE Conference on Computer Communications (INFOCOM).

[18]  Jan Krämer,et al.  Network Neutrality and Congestion Sensitive Content Providers: Implications for Content Variety, Broadband Investment and Regulation , 2012, Inf. Syst. Res..