Guaranteeing User Welfare in Network Service: Comparison of Two Subsidy Schemes

1. ACM Sigmetrics W-PIN, London Guaranteeing User Welfare in Network Service:Comparison of Two Subsidy Schemes Seung Min Yu and Seong-Lyun Kim RAdio resource Management and Optimization Laboratory (RAMO)School of EEE, Yonsei University, Seoul, Korea{smyu, slkim}@ramo.yonsei.ac.kr

2. Contents • Background (Motivation of the Study) • User Welfare • Two Subsidy Schemes • System Model • User Demand, QoS, Service Price, and NSP’s Profit Maximization • Comparison • Conventional, Price- and QoS Subsidy Schemes • Discussion • A Hybrid Subsidy…

3. Motivation

4. User Welfare Traffic Explosion High Service Price Polarization of Data Usage “Some users cannot consume data because they are economically unstable, or live in rural area” Decrease of User Welfare?

5. Players in Network Service Regulator Regulation NSPs Revenue Bertrand Competition (Price) Cournot Competition (Capacity) Investment Price Demand Networks Users QoS

6. Two Subsidy Schemes • Price Subsidy Scheme • The regulator gives an equal price subsidy to each user that accesses network service. • Source of the price subsidy is from the spectrum sales revenue. • QoS Subsidy Scheme • The regulator gives all of the available spectrum amount to network service provider (NSP) for free in return for providing a predefined QoS level to users without any charge.

7. System Model

8. User Behavior • We consider three schemes. • Price subsidy scheme • QoS subsidy scheme • Conventional scheme (no subsidy) • Each user decides whether to access the network or not considering the service price and QoS. • Each user has own QoS requirement and willingness to pay for it (User Type).

9. Mathematical Notations

10. User Type and QoSModeling (J. Walrand) • Price ≤ User Type ≤ QoS

11. User Demand

12. User Type, Demand, Service Price and QoS • Price and QoSconditions <Conventional Scheme> <Price Subsidy Scheme> <QoSSubsidy Scheme>

13. NSP’s Profit Maximization Problem <Conventional Scheme> <Price Subsidy Scheme> <QoSSubsidy Scheme>

14. Comparison

15. Optimal Solution • Conventional Scheme • Price Subsidy Scheme • QoS Subsidy Scheme

16. Conventional- vs. Price Subsidy Scheme (1/3) • Maximal Spectrum Usage

17. Conventional- vs. Price Subsidy Scheme (2/3)

18. Conventional- vs. Price Subsidy Scheme (3/3)

19. Price- vs. QoS Subsidy Scheme • If the regulator has sufficient spectrum for the network service, then the QoS subsidy scheme will be a good choice for all players in the network service market.

20. Discussion

21. Summary • We introduced price and QoS subsidy schemes, and analyze the effect of each scheme. • If the regulator has sufficient spectrum for the network service, then the QoSsubsidy scheme will be a good choice for all players in the network service market. • On the other hand, if the regulator does not have sufficient spectrum, the price subsidy scheme can be better for user welfare. • For taking advantage of both price and QoS subsidy schemes, we can suggest a hybrid subsidy scheme.

22. A Hybrid Subsidy Scheme • The regulator sells all of the available spectrum amount with a discounted price (not free) and requires NSP to provide a predefined QoS level for free. • At the same time, the regulator gives a price subsidy to users from the spectrum sales revenue.

23. Q&A

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