Network slicing: Is it worth regulating in a network neutrality context?

Abstract

Network slicing is a key component of 5G-and-beyond networks but induces many questions related to an associated business model and its need to be regulated due to its difficult co-existence with the network neutrality debate. We propose in this paper a slicing model in the case of heterogeneous users/applications where a service provider may purchase a slice in a wireless network and offer a “premium” service where the improved quality stems from higher prices leading to less demand and less congestion than the basic service offered by the network owner, a scheme known as Paris Metro Pricing. We obtain thanks to game theory the economically-optimal slice size and prices charged by all actors. We also compare with the case of a unique “pipe” (no premium service) corresponding to a fully-neutral scenario and with the case of vertical integration to evaluate the impact of slicing on all actors and identify the “best” economic scenario and the eventual need for regulation.