Paid Peering, Settlement-Free Peering, or Both?

With the rapid growth of congestion-sensitive and data-intensive applications, traditional settlement-free peering agreements with best-effort delivery often do not meet QoS requirements content providers (CPs). Meanwhile, Internet access (IAPs) feel that revenues from end-users are sufficient to recoup upgrade costs network infrastructures. Consequently, some IAPs have begun offer CPs a new type agreement, called paid peering, under which they provide better data quality for fee. In this article, we model platform where an IAP makes decisions on types offered prices charged end-users. We study optimal schemes IAP, i.e., both choose or only one them, as objective is profit welfare maximization. Our results show 1) should always profit-optimal welfare-optimal schemes, respectively, 2) whether simultaneously other largely driven by traffic, e.g., text video, 3) regulators might want encourage allocate more capacity increasing user welfare.