The Pricing Strategy Of Service Overlay Network

With the development of high-speed networks and communications, streaming media technology, a variety of new-style applications, VoIP, VOD and others with higher requirements in particular, have emerged in the Internet. The emergence of these new-style applications makes Internet's "best effort" service system encounter serious challenges. Existing Internet system has been unable to meet user's high-quality service requirements. Although new RFC standards have been developed for improving the Internet service quality by IETF, such as IntServ,DiffServ and Multi-Protocol Label Switching Models (MPLS). However, Internet has already been a complex system connected by a large number of heterogeneous autonomous domains, which makes it hard to introduce new capabilities or replace current technologies with something better. So solutions are accordingly found from the application layer, and SON networks come into being.SON is constructed on a higher network protocol, and operated by a third-party service provider OSP (Overlay Service Provider), and the aim of SON is providing end-users with QoS sensitive value-added services. OSP must provide high quality services to obtain benefits. Therefore, a reasonable pricing scheme is essential for SON's healthy operation. However, there is little research on SON's resources pricing. SON pricing model should be distinctive between applications, quality of service sensitive, and taking full account of interests of ISP, SON service providers and users, and complex cases including multiple SON service providers under a competitive market environment. Although some important achievements have been obtained in basic network pricing fields, such as QoS pricing, congestion pricing, static pricing and dynamic pricing, there is few methods completely applied to SON resource pricing. In this paper, the principles of economics-related on the SON resources pricing problems are studied, now the main contents and innovations of this study are summarized as follows:(1)A new overlay network price structure based on the demand is proposed, it consists of four parts: cost of service fees, resource use fees, congestion charges and service breach of contract charges. The price structure of price control model also takes into account of the profits of the OSP and user utility, and in network congestion control and management, network resource allocation and mobilization of the enthusiasm of other users have higher efficiency.(2)A resource pricing strategy based on Bi-level programming for SON is proposed, In this pricing strategy, the formulation of charges of the SON has been described as a Leader-Follower model. The upper level programming model aims to maximize the difference between benefits and costs of SON, the lower model uses the elastic demand model of Wardrop user equilibrium model. The validity of the model is analyzed through an example.(3)The reasons of the SON congestion phenomenon are analyzed, and introduced a pricing strategy controlling congestion- price strategy based on the incentive Stackelberg. In this strategy the SON is based side, the user is the obey side. SON release incentive-based strategy, setting prices, making the system of each link can be fully applied without the risk of congestion, and to promote system's rational distribution. Through a numerical example, the pricing strategy's effect on congestion control is tested.