Charging for Differentiated Internet Services

Internet communications today play a major role in data transport within the local as well as the wide area. On one hand, since emerging networked applications require a variety of different communication services, the number of service classes offered by service providers has to be targeted at this demand. On the other hand, assuming that a set of different traffic classes are offered by service providers, the “right” incentives have to be provided, ensuring that applications or their users select the most appropriate traffic class. Even though users are considered to be selective, they intent to chose that class which offers the best available Quality-of-Service (QoS), as long as the price to be paid does not exceed their willingness-to-pay. Therefore, charging for differentiated Internet services is important in a commercialized Internet. The current Internet does not cater for charging at all, since the technology required, the pricing models going beyond a flat-fee approach, and the appropriate efficiency in technical as well as economic terms are still missing on a global basis. This paper outlines the major problems for charging Internet services and presents an important new solution for a pricing approach, which solves the Internet pricing feasibility problem. Based on these preconditions an Internet Charging System (ICS) is described, focusing mainly on its leading characteristics and its particular instantiation for a given scenario.