Pricing with Bandwidth Guarantees for Clients with multi-ISP Connections

The increase in internet coverage and decrease in internet access price has resulted in demand for good internet service. Clients want some guarantee in internet access quality. In this paper, we present a model in which clients are guaranteed connection and bandwidth and if clients do not get the service they request, the service provider pays a penalty to the clients. We consider a system of internet clients with multiple internet service provider (ISP) connections to a set of ISPs. When a client arrives, an ISP has to decide whether to accept the client, and then the price to charge from the client for the duration of its connection. Rejection of a client results in a penalty and delay in getting the requested bandwidth also incurs a penalty. We assume a Poisson arrival process with the rate of arrival sensitive to the price being charged. A client requests bandwidth for a time that is exponentially distributed, then the client is idle for a time that is also exponentially distributed; and then either the client departs or requests bandwidth again after the idle period is over. A service provider tries to maximize its income by charging appropriate prices based on its current state and deciding whether to accept more clients or not. Since penalties are imposed, such solutions also automatically balance load among service providers, and so the quality of service to clients improves. We present solutions that maximize the income of service providers. The solutions are then compared using simulation. Simulation results show that our analysed solution significantly improve quality of service of clients and increase the income of service providers as compared to a simple heuristic based solution that is otherwise could to be used.