Dynamic Pricing of Wireless Internet Based on Usage and Stochastically Changing Capacity

Inspired by new developments in dynamic spectrum access, we study the dynamic pricing of wireless internet access when demand and capacity (i.e., available bandwidth) are both stochastic. The demand for wireless internet access has increased enormously in recent years. However, the spectrum available to wireless service providers is limited. The industry has thus expanded conventional license-based spectrum access policies through unlicensed spectrum operations. However, the additional spectrum obtained through these unlicensed operations has stochastic availability. This creates novel challenges for the service provider when determining the optimal pricing for this service. The dynamic pricing problem considered in this paper is therefore both of high practical relevance and new to the academic literature.