A novel approach to charge for IP services with QoS support

If the Internet is to become a network supporting differentiated application and transfer services, advanced architectures must be deployed to efficiently support hard Quality of Service (QoS) and usage-based charging. In this paper we present a novel pricing scheme for IP services with guaranteed quality. Our approach is built on the basis of the virtual delay, which is a novel, simple and effective QoS index that describes an advanced IP service. We propose a model to compute the virtual delay from a purely technical point of view, taking into account not only guaranteed performance, but also traffic and system parameters. We then analyze the sensitivity of both the virtual delay and the tariff towards the involved parameters, taking into account both the users’ benefit and the operators’ income. We also extend the pricing model to make it dependent on service demand. Finally, we also present an economic analysis, the aim of which is to establish a model to set the QoS level and the relevant price, taking into account revenue, social fairness, and service availability.