1. Interconnecting Eyeballs to Content: A Shapley Value Perspective on ISP Peering and Settlement Richard T.B. Ma Columbia University Dah-ming Chiu, John C.S. Lui The Chinese University of Hong Kong Vishal Misra, Dan Rubenstein Columbia University

2. Outline Current ISP Settlement Problems Eyeball/Content ISP Model Profit Sharing Among ISPs Future work

3. What is an Internet Service Provider (ISP)? The Internet is composed of Autonomous Systems (ASes). An ISP is a business entity. –Comprise multiple ASes. –Provide Internet access. –Objective: maximize profits. ISP

4. Eyeball ISPs –Provide Internet access to customers: –Place Large investment on infrastructure. –E.g. AT&T, Verizon … Content ISPs –Provide contents via the Internet. –Serve customers like: Transit ISPs –Tier 1 ISPs: global connectivity of the Internet. –Provide transit services for other ISPs. –Cover a large geographic area. Different classes of players

5. Content ISP Transit ISP Eyeball ISP Information and money flows on the Internet Revenue from content providers Monthly service payment Transit service revenue

6. Problems of the current settlement model Transit Eyeball Content Providers

7. Service DifferentiationNetwork Neutrality Net Neutrality Debate: Whether or not to provider Service Differentiation? Network Balkanization: De-peering between ISPs Consequences of the current settlement model How to appropriately share profits amongst ISPs? Transit Eyeball Transit zero-dollar peering Content Providers

8. Contribution of this work Modeling of ISPs –How the revenues are generated? –How different kinds of ISPs interact with one another? Appropriate Profit Sharing Among ISPs –Efficiency –Fairness –Uniqueness

9. The Network Model: Eyeball Side Geographic Regions ( r ) Monthly Charge (  r ) Customer Size ( X r ) Eyeball ISP ( B j ) Eyeball-side revenue from a region r (  r X r )

10. Eyeball Side Demand Assumption Elastic intra-region demand –Switch among ISPs in a region. –New eyeballs may take customers from other eyeballs in the same region. –Customers move to other eyeballs when the original eyeball leaves the system. Inelastic inter-region demand –Cannot switch to ISPs in other regions. –Constant customer size in a region.

11. The Network Model: Content Side Content Items ( q ) Content ISP ( C i ) Per Customer Revenue (  q ) Content-side revenue (  q X r ) How to share profits amongst ISPs?

12. How to share profit? -- the baseline case One content and one eyeball ISP. One region, US, and one content, ♫. Egalitarian profit sharing:

13. How to share profit? -- multiple eyeballs Symmetry: two eyeballs get the same profit. Efficiency: summation of three ISPs’ profit equal v. Balanced Contribution:

14. How to share profit? -- multiple eyeballs The unique solution (Shapley value) that satisfies Efficiency Symmetry and Balanced Contribution: n eyeball ISPs.

15. Results and implications of profit sharing The more eyeballs, the more profit the content ISP gets. –Multiple eyeballs provide redundancy; –The only content has more leverage. The marginal profit of the content ISP: –If n=1, the content loses everything if the eyeball leaves. –The content loses only 1/n 2 of its original profit, because users move to other eyeball ISPs.

16. How to share profit? -- multiple contents m content ISPs. The unique solution (Shapley value) that satisfies Efficiency Symmetry and Balanced Contribution:

17. Results and implications of profit sharing The more contents, the more profit the eyeball ISP gets. –Multiple contents provide redundancy; –The only eyeball ISP has more leverage. The marginal profit of the eyeball ISP: –If m=1, the eyeball loses everything if the content leaves. –The eyeball loses only 1/m 2 of its original profit, because users get content from other content ISPs.

18. How to share profit? -- multiple eyeballs and contents The unique solution (Shapley value) that satisfies Efficiency Symmetry and Balanced Contribution:

19. How to share profit? -- multiple regions and items n eyeball ISPs and m content ISPs. Each eyeball covers a set of regions. Each content provides a set of items. Components of total profit –Eyeball-side revenue –Content-side revenue

20. How to share profit? -- multiple regions and items Additivity Property of the Shapley value –Distribute components of the total profit separately. Distribute eyeball-side revenue (  $ X $ and  ₤ X ₤ ) to: –Eyeballs that cover the region where the profit is generated from. –All content ISPs.

21. How to share profit? -- multiple regions and items Distribute content-side revenue (  ♫ X $,  ♫ X ₤,  ♣ X $ and  ♣ X ₤ ) to: –Eyeballs that cover the region where the profit is generated from. –Content ISPs that provide the item that generates the profit.

22. Summary Content/Eyeball ISP model –Customer demand –Revenue generation Closed-form Shapley value profit sharing solution –Efficiency, Symmetry and Balanced Contribution –Additivity, Strong Monotonicity, Dummy … –Incentives for optimal routing and interconnecting decision (CoNEXT 07)

23. Future Work and New Results Include Transit ISPs General Internet Topology Implications for Bilateral Agreements among ISPs