Tellabs and the Smart Pipe (Game Theory edition)

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Tellabs has a long paper out ostensibly showing that the ISPs should move to a 'Smart Pipe' world, for the betterment of mankind.  I won't bore you with the details (if you feel like it, read the summary here), but in a nutshell, it says that Smart Pipes are needed to

1. Ensure that data is transported efficiently so that capital and operating costs are minimised... 
2. Improve user experience by matching the performance of the network to the nature of the application or service being used...
3. Charge appropriately for use of the network...
I'm not even going to bother getting into any of the above.
Really.
I mean, seriously.  Whats the point?  Its basically a flame-bait, just thrown out there

However, I do want to use this as an opportunity to bring up a paper by Cheng, Bandyopadhyay, and Guo, talking about Net-Neutrality in terms of Game Theory*. It takes the idea of Network Optimization (or its Evil Twin, Network Throttling) back to basics, i.e., it asks the simple question Cui Bono? (For all you philistines out there, Who Benefits?).
Consider your local ISP - Bob's Network Company.  Everybody pays pretty much the way they pay now.
Bob comes to you, and says"Hey!  I'll prioritize your traffic, if you pay me an extra $100/month"
If there are no bandwidth/latency issues, you're probably answer is "Meh".  After all, things are fine, why pay? (Remember, this is a rational decision on your part.
A year from now, Bob has a lot more subscribers, bandwidth sucks sometimes, and Bob approaches you again.
Your answer this time around is "Sure!  I Need This!".
So far so good, right?
The problem here is, what is Bob's Incentive?  His Motivation?
He could take this money, and upgrade his network.  Except, the moment that  bandwidth is plentiful, nobody else (you included!) is going to pay him $100/month for prioritization!
Ergo, Bob's Incentive, from a Game Theory perspective, is to keep the network always Just Bad Enough that people will pay for prioritization.
The point being, the Market works, its just not necessarily working for you....


* For a nice writeup about the article, check out Science Daily from back when, and a recent GigaOm article.





Comments

Anonymous said…
doh! competition forces operators to make networks better and faster. bit of a flaw in your dumb argument. STL Partners paper is very good BTW. Thanks for link
December 9, 2011 at 3:59 AM
dieswaytoofast said…
Ummm, what competition?
December 9, 2011 at 6:21 AM
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