Providing Internet Access: What we learn from the INDEX Trial∗ INDEX Project Report #99-010W

The Internet Demand Experiment or INDEX is a market and technology trial. Its objective is to determine how much users value different qualities of service for Interent access. Findings from the trial imply that today’s system of flat-rate pricing by ISPs is very inefficient. Flat-rate pricing wastes resources, requires light users to subsidize heavy users, and hinders deployment of broadband access. INDEX is a prototype of an alternative ISP model that offers differentiated-quality service on demand, with prices that reflect resource cost. In this alternative ISP consumers pay less, suppliers increase profits, and the deployment of broadband access is facilitated. The INDEX Project is supported by the National Science Foundation, Cisco Systems, SBC Communications and the California State MICRO Grant program. ∗We thank Jörn Altmann, Karyen Chu and Hal Varian for use of their unpublished results. A version of this paper was presented as the keynote talk at Infocom ’99.