Exploring Traffic Pricing for the Virtual Private Network

  • Authors:
  • Zhangxi Lin;Peng Si Ow;Dale O. Stahl;Andrew B. Whinston

  • Affiliations:
  • College of Business Administration, Texas Tech University, USA;CREC, The University of Texas at Austin, USA;Department of Economics, The University of Texas at Austin, USA;CREC, The University of Texas at Austin, USA

  • Venue:
  • Information Technology and Management
  • Year:
  • 2002

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Abstract

This paper explores the implementation issues of network traffic pricing in Internet-based virtual Private Networks (VPNs). A simplified VPN traffic-pricing formula is derived for optimizing VPN bandwidth service welfare. We provide price formulae for both prioritized first-in-first-out bandwidth scheduling and non-prioritized round-robin bandwidth scheduling. A transaction-level pricing architecture based on proxy server technology is proposed, and a prototype traffic-pricing system, VPN Traffic-Pricing Experiment System (VTPES), has been developed to test the transaction-level pricing architecture and examine the pricing formula. Experiments conducted with VTPES show that the pricing mechanism can effectively improve a VPN's transmission efficiency.