How multihoming will affect ISP pricing models?
This is so-called ISP pricing problem, i.e., how ISPs respond to users’ optimal ISP subscription by adjusting their pricing strategies. Using a realistic charging model, we formulate the problem as a non-cooperative game. We first prove that if cost is the only criterion used by a user to determine which subset of ISPs to subscribe to, at any equilibrium all ISPs receive zero revenue. We then study a more practical formulation in which different ISPs provide different levels of reliability and users choose ISPs to both improve reliability and reduce cost. We analyze this problem and show that at any equilibrium an ISP’s revenue is positive and determined by its reliability.
