The Public Option: A non-regulatory alternative to Network Neutrality - PowerPoint PPT Presentation

The Public Option: A non-regulatory alternative to Network Neutrality Richard Ma Advanced Digital Sciences Center, Illinois at Singapore School of Computing, National University of Singapore Joint work with Vishal Misra (Columbia University) ACM CoNEXT 2011

The Internet Landscape  Internet Service Providers (ISPs)  Internet Content Providers (CPs)  Regulatory Authorities  Users/Consumers

Network Neutrality (NN) Better! Happy?

Paid Prioritization (PP) Happier?

Highlights  A more realistic equilibrium model of content traffic, based on  User demand for content  System protocol/mechanism  Game theoretic analysis on user utility under different ISP market structures:  Monopoly, Duopoly & Oligopoly  Regulatory implications for all scenarios and the notion of a Public Option

Three-party model (𝑁, 𝜈, 𝒪) 𝝁 𝒋 𝝂 𝒪 𝑵 ⋮ ⋮  𝜈 : capacity of a single access (eyeball) ISP  𝑁 : # of users of the ISP (# of active users)  𝒪 : set of all content providers (CPs)  𝜇 𝑗 : throughput rate of CP 𝑗 ∈ 𝒪

User-side: 3 Demand Factors  Unconstrained throughput 𝜄 𝑗  Upper-bound, achieved under unlimited capacity  E.g. 5Mbps for Netflix  Popularity of the content 𝛽 𝑗  Google has a larger user base than other CPs.  Demand function of the content 𝑒 𝑗 (𝜄 𝑗 )  Percentage of users still being active under the achievable throughput 𝜄 𝑗 ≤ 𝜄 𝑗

Unconstrained Throughput 𝜇 𝑗 𝒋 (= 𝟖𝑳𝒄𝒒𝒕) User size 𝑵(= 𝟐𝟏) (Max) Throughput 𝜾 Content unconstrained throughput Content popularity 𝒋 = 𝜷 𝒋 𝑵𝜾 𝒋 (= 𝟓𝟑𝑳𝒄𝒒𝒕) 𝜷 𝒋 (= 𝟕𝟏%) 𝝁

Demand Function 𝒆 𝒋 𝜾 𝒋 demanding # of users 𝜷 𝒋 𝑵𝒆 𝒋 𝜾 𝒋 𝜷 𝒋 𝑵 achievable 𝒋 throughput 𝜾 𝜾 𝒋

Demand Function 𝒆 𝒋 𝜾 𝒋 demanding # of users 𝜷 𝒋 𝑵𝒆 𝒋 𝜾 𝒋  Assumption 1: 𝑒 𝑗 𝜄 𝑗 is continuous and non-decreasing in 𝜄 𝑗 with 𝑒 𝑗 𝜄 𝑗 = 1 .  More sensitive to throughput 𝜷 𝒋 𝑵  Throughput of CP i: 𝝁 𝒋 𝜾 𝒋 = 𝜷 𝒋 𝑵𝒆 𝒋 𝜾 𝒋 𝜾 𝒋 achievable 𝒋 throughput 𝜾 𝜾 𝒋

System Side: Rate Allocation  Axiom 1 (Throughput upper-bound) 𝑗 𝜄 𝑗 ≤ 𝜄  Axiom 2 (Work-conserving) 𝑗 𝜇 𝒪 = 𝜇 𝑗 = min 𝜈, 𝜇 𝑗∈𝒪 𝑗∈𝒪  Axiom 3 (Monotonicity) 𝜄 𝑗 𝑁, 𝜈 2 , 𝒪 ≥ 𝜄 𝑗 𝑁, 𝜈 1 , 𝒪 ∀ 𝜈 2 ≥ 𝜈 1

Uniqueness of Rate Equilibrium  Theorem (Uniqueness): A system (𝑁, 𝜈, 𝒪) has a unique equilibrium {𝜄 𝑗 ∶ 𝑗 ∈ 𝒪} (and therefore {𝜇 𝑗 ∶ 𝑗 ∈ 𝒪} ) under Assumption 1 and Axiom 1, 2 and 3. User demand: { 𝜄 𝑗 } → {𝑒 𝑗 } Rate allocation: μ, 𝑒 𝑗 → {𝜄 𝑗 }  Rate equalibrium: {𝜄 𝑗 ∗ }, {𝑒 𝑗 ∗ }

ISP Paid Prioritization ISP Payoff: 𝑑 = 𝑑𝜇 𝒬 𝜇 𝑗 𝑗∈𝒬 Capacity Charge Premium Class 𝝀𝝂 $ 𝒅 /unit traffic 𝑵, 𝝀𝝂, 𝓠 Ordinary Class (𝟐 − 𝝀)𝝂 $ 𝟏 𝑵, 𝟐 − 𝝀 𝝂, 𝓟

Monopolistic Analysis  Players: monopoly ISP 𝐽 and the set of CPs 𝒪  A Two-stage Game Model 𝑁, 𝜈, 𝒪, 𝐽  1 st stage, ISP chooses 𝑡 𝐽 = (𝜆, 𝑑) announces 𝑡 𝐽 .  2 nd stage, CPs simultaneously choose service classes reach a joint decision 𝑡 𝒪 = (𝒫, 𝒬) .  Outcome (two subsystems):  𝑁, 𝜆𝜈, 𝒬 : set 𝒬 (of CPs) share capacity 𝜆𝜈  𝑁, 1 − 𝜆 𝜈, 𝒫 : set 𝒫 share capacity 1 − 𝜆 𝜈

Utilities (Surplus)  ISP Surplus: 𝐽𝑇 = 𝑑 = 𝑑𝜇 𝒬 ; 𝜇 𝑗 𝑗∈𝒬  Consumer Surplus: 𝐷𝑇 = 𝜚 𝑗 𝜇 𝑗 𝑗∈𝒪  𝜚 𝑗 : per unit traffic value to the users  Content Provider:  𝑤 𝑗 : per unit traffic profit of CP 𝑗 𝑤 𝑗 𝜇 𝑗 if 𝑗 ∈ 𝒫, 𝑣 𝑗 𝜇 𝑗 = if 𝑗 ∈ 𝒬. 𝑤 𝑗 − 𝑑 𝜇 𝑗

Type of Content Profitability of CP 𝒘 𝒋 Value to users 𝝔 𝒋

Monopolistic Analysis  Players: monopoly ISP 𝐽 and the set of CPs 𝒪  A Two-stage Game Model 𝑁, 𝜈, 𝒪, 𝐽  1 st stage, ISP chooses 𝑡 𝐽 = (𝜆, 𝑑) announces 𝑡 𝐽 .  2 nd stage, CPs simultaneously choose service classes reach a joint decision 𝑡 𝒪 = (𝒫, 𝒬) .  Theorem: Given a fixed charge 𝑑 , strategy ′ = (1, 𝑑) . 𝑡 𝐽 = (𝜆, 𝑑) is dominated by 𝑡 𝐽  The monopoly ISP has incentive to allocate all capacity for the premium service class.

Utility Comparison: Φ vs 𝛺 𝜉 = 𝜈/𝑁 Φ = 𝐷𝑇/𝑁 Ψ = 𝐽𝑇/𝑁

Regulatory Implications  Ordinary service can be made “damaged goods”, which hurts the user utility.  Implication: ISP should not be allowed to use non-work-conserving policies ( 𝜆 cannot be too large).  Should we allow the ISP to charge an arbitrarily high price 𝑑 ?

High price 𝑑 is good when Profitability of CP 𝒘 𝒋 Value to users 𝝔 𝒋

High price 𝑑 is bad when Profitability of CP 𝒘 𝒋 Value to users 𝝔 𝒋

Oligopolistic Analysis  A Two-stage Game Model 𝑁, 𝜈, 𝒪, ℐ  1 st stage: for each ISP 𝐽 ∈ ℐ chooses 𝑡 𝐽 = (𝜆 𝐽 , 𝑑 𝐽 ) simultanously.  2 nd stage: at each ISP 𝐽 ∈ ℐ , CPs choose service 𝐽 = (𝒫 𝐽 , 𝒬 𝐽 ) classes with 𝑡 𝒪  Difference with monopolistic scenarios:  Users move among ISPs until the per user utility Φ 𝐽 is the same, which determines the market share of the ISPs  ISPs try to maximize their market share.

Duopolistic Analysis 𝓠 ISP 𝑱 with 𝒕 𝑱 = (𝝀, 𝒅) 𝓟 ISP 𝑲 with 𝒕 𝑲 = (𝟏, 𝟏) 𝓞

Duopolistic Analysis: Results  Theorem: In the duopolistic game, where an ISP 𝐾 is a Public Option, i.e. 𝑡 𝐾 = (0, 0) , if 𝑡 𝐽 maximizes the non-neutral ISP 𝐽 ’s market share, 𝑡 𝐽 also maximizes user utility.  Regulatory implication for monopoly cases:

Oligopolistic Analysis: Results  Theorem: Under any strategy profile 𝑡 −𝐽 , if 𝑡 𝐽 is a best-response to 𝑡 −𝐽 that maximizes market share, then 𝑡 𝐽 is an 𝜗 – best-response for the per user utility Φ .  The Nash equilibrium of market share is an 𝜗 -Nash equilibrium of user utility.  Oligopolistic scenarios:

Regulatory Preference ISP market structure Oligopoly Monopoly User Utility