The economics of quality sponsored data in wireless networks

The growing demand for data has driven the Service Providers (SPs) to provide differential treatment of traffic to generate additional revenue streams from Content Providers (CPs). While SPs currently only provide best-effort services to their CPs, it is plausible to envision a model in near future, where CPs are willing to sponsor quality of service for their content in exchange of sharing a portion of their profit with SPs. In this paper, we introduce the problem of Quality-Sponsored Data (QSD) in cellular networks and study its implications on market entities in various scenarios. The direct coupling between the scarce wireless resources and the market decisions resulting from QSD is taken into account. In our model, SPs make a portion of their resources available for sponsorship by CPs, and price it appropriately to maximize their payoff, which depends on the monetary revenue and the satisfaction of end-users both for the non-sponsored and sponsored content, while CPs generate revenue through advertisement. We analyze the market dynamics and equilibria, and provide strategies for (i) SPs: to determine if and how to price resources, and (ii) CPs: to determine if and what quality to sponsor. We also discuss about the effects of different parameters of the model on market dynamics.