Abstract
The assurance of end-to-end Quality-of-Service (QoS) in the Internet requires quality differentiation across network boundaries (inter-provider QoS). There is a controversial debate of practitioners and academic researchers on the introduction of QoS in the Internet and its economic consequences. This article contributes to this debate by analyzing a market scenario for the formation of inter-provider QoS with agent-based simulations. Based on market data of the Best-Effort interconnection market and heterogeneous market samples, we simulate the development of multi-network QoS infrastructures in a Sending-Party-Pays (SPP) regime. For different market phases, we analyze the progression of market shares and the influence of transit providers’ distinctive properties, such as the number of interconnections and the data demand, on their market shares. The results allow an identification and specification of economic developments in an inter-provider QoS market. We show that a network operator’s data demand and geographical presence determine market shares in the analyzed expert scenario. As a consequence, the market position of access providers is strengthened in the long term. Our analysis supports the assessment of to the date unknown prospects and threats regarding the introduction of an SPP regime for QoS interconnection.
Recommended Citation
Wulf, Jochen; Limbach, Felix; Zarnekow, Ruediger; and Dueser, Michael, "Economics of a Quality-of-Service interconnection market - A simulation-based analysis of a market scenario" (2011). ICIS 2011 Proceedings. 5.
https://aisel.aisnet.org/icis2011/proceedings/generaltopics/5
Economics of a Quality-of-Service interconnection market - A simulation-based analysis of a market scenario
The assurance of end-to-end Quality-of-Service (QoS) in the Internet requires quality differentiation across network boundaries (inter-provider QoS). There is a controversial debate of practitioners and academic researchers on the introduction of QoS in the Internet and its economic consequences. This article contributes to this debate by analyzing a market scenario for the formation of inter-provider QoS with agent-based simulations. Based on market data of the Best-Effort interconnection market and heterogeneous market samples, we simulate the development of multi-network QoS infrastructures in a Sending-Party-Pays (SPP) regime. For different market phases, we analyze the progression of market shares and the influence of transit providers’ distinctive properties, such as the number of interconnections and the data demand, on their market shares. The results allow an identification and specification of economic developments in an inter-provider QoS market. We show that a network operator’s data demand and geographical presence determine market shares in the analyzed expert scenario. As a consequence, the market position of access providers is strengthened in the long term. Our analysis supports the assessment of to the date unknown prospects and threats regarding the introduction of an SPP regime for QoS interconnection.