Interaction of ISPs: Distributed Resource Allocation and Revenue Maximization

Sam C.M. Lee, Joe W.J. Jiang, John C.S. LuiThe Chinese University of Hong Kong

Tier-1 ISP

Tier-2 ISP

Local ISP

Peering link

Tier-2 ISP

Local ISP

Peering link

ISP

PeerISP link

ISP

Peer

Peer

PeerPeer

Peer

Peer kPeer j

Tier-2 ISP(ISP)

Peer i

1. performance of the link

2. charge of the link

Issues to consider:

Optimization problem of peers

Optimization problem of peersHappiness obtained from sending traffic to peers

Delay cost in ISP link

Payment to ISP

Delay costs in peering links

Payments to peers

Constraints of peers

1.

2.

3.

4.

Solution to the peers

• Objective function is strictly concave in every transmission rate

• The optimal transmission rates and maximum utility are unique and can be found by Lagrangian method

Problems for an ISP

• Maximization of revenue– How to determine the optimal value of unit price

• Resource distribution– How to determine the capacity for the peers

Information exchange framework

ISP peer

Bandwidthallocation Bid

Compute resourcedistribution

Computeoptimalrates

Next period

ISP 1: Resource distribution

peer1

Bid = 50MBps

? ? ?

ISP

peer2 peer3

Bid = 100MBps Bid = 150MBps

Bandwidth = 600MBps

Proportional share algorithm

peer1 peer2 peer3

Bid = 50MBps Bid = 100MBps Bid = 150MBps

ISP Bandwidth = 600MBps

100MBps 200MBps 300MBps

Equal share algorithm

peer1 peer2 peer3

Bid = 50MBps Bid = 100MBps Bid = 150MBps

ISP Bandwidth = 600MBps

150MBps 200MBps 250MBps

Simulations

• When the happiness coefficients of peers are low

PSA ESA

• When the happiness coefficients of peers are high

PSA ESA

ISP 2: Maximization of Revenue

Unit price Demand by peer i

Determine the optimal price

Total revenue from the peers

Solution: Maximization of revenue

•Estimate the aggregate traffic ( ) from all

peers in term of the price (P)

Conclusions

• Utility maximization of a peer

• Resource distribution of ISP

• Revenue maximization of ISP

Q & A