Network Non-Neutrality through Preferential Signaling

One of the central issues in the debate on network neutrality has been whether one should allow or prevent preferential treatment by an internet service provider (ISP) of traffic according to its origin. This raised the question of whether to allow an ISP to have exclusive agreement with a content provider (CP). In this paper we consider discrimination in the opposite direction. We study the impact that a CP can have on the benefits of several competing ISPs by sharing private information concerning the demand for its content. More precisely, we consider ISPs that compete over access to one common CP. Each ISP selects the price that it charges its subscribers for accessing the content. The CP is assumed to have private information about demand for its content, and in particular, about the inverse demand function corresponding to the content. The competing ISPs are assumed to have knowledge on only the statistical distribution of these functions. We derive in this paper models for studying the impact that the CP can have on the utilities of the ISPs by favoring one of them by exclusively revealing its private information. We also consider the case where CP can charge ISPs for providing such information. We propose two mechanisms based on weighted proportional fairness for payment between ISPs and CP. Finally, we compare the social utility resulting from these mechanisms with the optimal social utility by introducing a performance metric termed as price of partial bargaining.