Content and Access Networks Synergies: Tradeoffs in Public and Private Investments by Content Providers

TL;DR

The paper addresses how content providers should balance public investments in neutral ISP infrastructure with private investments to optimize CP profits and QoS, under four interaction models. It uses a concave utility framework with $g_n(x)=a_n\log(1+x)$ and $h_n(x)=b_n\sqrt{x}$ to derive investment strategies and trade-offs, including closed-form expressions in the centralized and non-cooperative settings. It finds that bargaining can increase public investment relative to centralized allocation, but strong private-investment incentives can erode these gains; the analysis also quantifies the price of anarchy and social welfare under different regimes. The work provides regulatory insights suggesting that bargaining-like mechanisms could promote higher public investment in access networks while accounting for CPs' private investments, potentially improving overall Internet QoS and social utility.

Abstract

The ubiquity of smartphones has fueled content consumption worldwide, leading to an ever-increasing demand for a better Internet experience. This has necessitated an upgrade of the capacity of the access network. The Internet service providers (ISPs) have been demanding that the content providers (CPs) share the cost of upgrading access network infrastructure. A \emph{public investment} in the infrastructure of a neutral ISP will boost the profit of the CPs, and hence, seems a rational strategy. A CP can also make a \emph{private investment} in its infrastructure and boost its profits. In this paper, we study the trade-off between public and private investments by a CP when the decision is made under different types of interaction between them. Specifically, we consider four interaction models between CPs -- centralized allocation, cooperative game, non-cooperative game, and a bargaining game -- and determine the public and private investment for each model. Via numerical results, we evaluate the impact of different incentive structures on the utility of the CPs. We see that the bargaining game can result in higher public investment than the non-cooperative and centralized models. However, this benefit gets reduced if the CPs are incentivized to invest in private infrastructure.

Figures (8)

• Figure 1: Annual revenue (in million US dollars) of AT&T, Verizon, Alphabet, and Meta.
• Figure 2: Variation of optimum total public investment, optimum total private investment, public-private trade-off, and optimum total utility against different values of $\delta$ and $\textbf{b}$ for centralized allocation and $N=2$ in (a), (b), (c), and (d), respectively.
• Figure 3: Variation of optimum total public investment, optimum net utility, and public-private trade-off against different values of $\delta$ and $\textbf{b}$ for centralized allocation and cooperative game and $N=2$ in (a), (b), and (c), respectively.
• Figure 4: Illustration of the price of anarchy ($\eta$), the public-private trade-off ($\gamma_{N}$), and $\Gamma$ against different values of $\psi_{n}(=r_{n}a_{n})$ for non-cooperative game for $N=2$ and $\textbf{b}=[1, 1]$ in (a), (b), and (c), respectively.
• Figure 5: Illustration of the price of anarchy ($\eta$), the public-private trade-off ($\gamma_{N}$), and $\Gamma$ against different values of $\psi_{n}(=r_{n}a_{n})$ for non-cooperative game for $N=2$ and $\textbf{b}=[2, 2]$ in (a), (b), and (c), respectively.

Theorems & Definitions (23)

• Remark 1
• Remark 2
• Lemma 1
• Remark 3
• Lemma 2
• Theorem 1
• Definition 1: Stability of Grand Coalition
• Lemma 3
• Theorem 2
• Theorem 3