Economic incentives for adopting congestion accountability protocols

New Internet protocols such as ECN, re-ECN and Conex, provide valuable information to ISPs about the congestion within a network. Such information could be useful in allocating network resources more equitably, as well as to employ new pricing schemes. However, in designing a new protocol one must take proper account of the incentive issues that thereby arise for its adoption. In this paper, we consider a duopoly market consisting of two access ISPs and formulate a noncooperative game over their choices of pricing strategies when one of them uses volume-based and the other congestion-based pricing. We prove, under mild conditions, the existence of a pure strategy Nash equilibrium for the competing providers. We further examine how the different types of transit charges affect the pricing strategies of the access ISPs. We find cases where the volume charging ISP is forced to leave the access market. We conclude that ISPs have economic incentives to adopt congestion accountability mechanisms, since they become more competitive due to the smoother and more predictable traffic they have to accommodate and to the lower transit charges they incur.