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W-PIN 2012, London, UK . ISP vs. ISP+CDN: Can ISPs in Duopoly Profit by Introducing CDN Services?. Dongmyung Lee Seoul National University June 11, 2012. Joint work with J. Mo and J. Park. Introduction Model The Game Numerical Results Conclusion. Contents. - PowerPoint PPT Presentation
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ISP vs. ISP+CDN: Can ISPs in Duopoly Profit by Introducing CDN Services?Dongmyung LeeSeoul National UniversityJune 11, 2012
Joint work with J. Mo and J. Park
W-PIN 2012, London, UK
Contents• Introduction•Model•The Game•Numerical Results•Conclusion
2/14
What is Content Delivery Network (CDN)?
CDN: Content Delivery Net-work
ISP A
CP BCP A
ISP B
User A User B
Re-gion:
<Internet Ecosystem without CDN provider>
: Traffic Flow
3/14
A B
What is Content Delivery Network (CDN)?
CDN: Content Delivery Net-work
ISP A
CP BCP A
ISP B
User A User B
Re-gion:
<Internet Ecosystem with CDN provider>
: Traffic Flow
CDN
: Cash Flow
$$$
CacheServer
CacheServer
4/14
A B
Current Issues related to CDN• ISP-operated CDN
▫ “BT Wholesale Readies CDN Launch” (Video Nuze, 2010) “The goal is to…maintain highest quality of service to their content customers”
▫ “AT&T Announces New CDN Service” (ReadWrite Cloud, 2011) “AT&T will enable content to flow directly from its 38 data centers around the world, to reduce tran-
sit and latency times
• Other Telco CDNs▫ Level 3▫ Verizon▫ Deutsche Telekom▫ Orange France Telecom▫ Korea Telecom▫ …
5/14
Problem Statement
ISP Ausers CPs <Relationship without CDN>
ISP Ausers CPs
CDN
CDN: Content Delivery Net-work
<Relationship with CDN>
<Relationship with ISP+CDN>ISP Ausers CPs
CDN
• Key Question:▫ Is there an incentive for an ISP under competition to vertically integrate CDN?
ISP+CDN
6/14
Model• Two-sided market with ISPs as platforms• ISPs are located à la Hotelling where consumers and CPs are distributed in
[0,1]
7/14
Utility• Consumer and CP Utility (Hotelling model)
▫ Consumer’s Utility
▫ Content Provider’s Utility
• ISPs’ Payoffs
ti: market share of ISP i in the consumer side si: market share of ISP i in the CP side hi: hit ratio of ISP i‘s cache server
▫ Full market coverage:
8/14
Delay• Delay function
τi: incoming traffic of ISP i’s network βi: network capacity parameter (capa.=1/βi)
▫ Network delay
▫ User’s perceived delay
▫ CP’s perceived delay
9/14
The Game• 4-stage Stackelberg game
1. CP pricing decisions: ISPs determine CP prices a1 and a2
2. CP connection decisions: CPs choose the ISPs
3. Consumer pricing decisions: ISPs determine User prices p1 and p2
4. User connection decisions: Users choose the ISPs
10/14
Market Share• Market Share of an ISP on one side becomes a function of the other
• Definition 1. (Equilibrium Market Share) An equilibrium market share is defined as the pair (t1
*, s1*) that satisfies
• Proposition 1. There exists an equilibrium market share
11/14
Numerical Results (with low congestion, β=3)
• “Competition effect” vs. “Delay reduction effect”
MS of ISP+CDN
MS of pure ISPDelay advan-tage
Price advantagePrice decrease
12/14
ISP+CDN vs. pure ISP: Who is better?• Map of dominance
▫ Linear cache server cost assumption
[Delay reduction effect] : [Competition ef -fect]
13/14
THANKS AND QUES-
TIONS
14/14