Guaranteeing user welfare in network service: comparison of two subsidy schemes

  • Authors:
  • Seung Min Yu;Seong-Lyun Kim

  • Affiliations:
  • Yonsei University, Seoul, Korea;Yonsei University, Seoul, Korea

  • Venue:
  • ACM SIGMETRICS Performance Evaluation Review
  • Year:
  • 2012

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Abstract

Due to the emergence of smart devices, mobile data traffic grows exponentially. A Cisco report predicts that global mobile data traffic will increase 26-fold between 2010 and 2015. Therefore, the spectrum shortage continues and the spectrum price increases, which will eventually lead to decrease of user welfare. Another side effect of the data traffic growth is the polarization of data traffic among users. To resolve these problems, we introduce two subsidy schemes (i.e., price and quality of service (QoS) subsidy schemes) and mathematically analyze the effect of each scheme. We identify that if the regulator has sufficient spectrum amount for the network service, then the QoS subsidy scheme will be a good choice for all players in the network service market. Otherwise, the price subsidy scheme can be better from user welfare perspective. Even though our analytic results are derived under some assumptions for mathematical tractability, it will provide good intuitions for spectrum regulation.