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Interconnecting eyeballs to content: a shapley value perspective on isp peering and settlement

Published: 22 August 2008 Publication History

Abstract

Internet service providers (ISPs) must interconnect to provide global Internet connectivity to users. The payment structure of these interconnections are often negotiated and maintained via bilateral agreements. Current differences of opinion in the appropriate revenue model in the Internet has on occasion caused ISPs to de-peer from one another, hindering network connectivity and availability.
Our previous work demonstrates that the Shapley value has several desirable properties, and that if applied as the revenue model, selfish ISPs would yield globally optimal routing and interconnecting decisions. In this paper, we focus our investigation of Shapley value in networks with two basic classes of ISP: content and eyeball. In particular, we analyze the revenue distribution between ISPs with elastic and inelastic customer demands, and calculate the bilateral payments between ISPs that implement the Shapley revenue. Our results illustrate how ISP revenues are influenced by different demand models. In particular, the marginal revenue lost by de-peering for an eyeball ISP with inelastic demand is inversely proportional to the square of its degree of connectivity to content ISPs. In practice, these results provide a guideline for ISPs, even in peering relationships, to negotiate bilateral payments and for regulatory institutions to design pricing regulations.

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cover image ACM Conferences
NetEcon '08: Proceedings of the 3rd international workshop on Economics of networked systems
August 2008
116 pages
ISBN:9781605581798
DOI:10.1145/1403027
Permission to make digital or hard copies of all or part of this work for personal or classroom use is granted without fee provided that copies are not made or distributed for profit or commercial advantage and that copies bear this notice and the full citation on the first page. Copyrights for components of this work owned by others than ACM must be honored. Abstracting with credit is permitted. To copy otherwise, or republish, to post on servers or to redistribute to lists, requires prior specific permission and/or a fee. Request permissions from [email protected]

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Association for Computing Machinery

New York, NY, United States

Publication History

Published: 22 August 2008

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Author Tags

  1. bilateral agreements
  2. content isp
  3. eyeball isp
  4. paid-peering
  5. shapley value

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  • Research-article

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SIGCOMM '08
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SIGCOMM '08: ACM SIGCOMM 2008 Conference
August 22, 2008
WA, Seattle, USA

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Overall Acceptance Rate 10 of 18 submissions, 56%

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