Pricing Network Resources: A New Perspective

We consider I users sending elastic traffic into a service provider\´s (SP\´s) network. Each user has a contract to transmit data at a nominal rate. However, a user is free to transmit at a higher rate if she wishes. For each user, we assume a realistic traffic model. A user alternates between two phases over time. In the limited data phase, a user\´s transmission rate is capped at some value below her contracted rate. This happens because the user does not have enough data to send. In the unlimited data phase, a user has enough data to sustain any rate. At time ti, a (possibly empty) set Si of users is in the limited data phase. This leaves unutilized resources in the network that ought to be exploited by others. At time t₂ > t₁, users in Si are back in the unlimited data phase. Now it should be possible for these users to reclaim their contracted rates at the expense of "overusers." We show that under certain conditions, a very simple pricing scheme can ensure fair and efficient operation in the above sense. A SP needs just one price for all the users.