Demand for quality-differentiated network services

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Future growth of Internet and other network services depends upon how these services are marketed. Two decisions are involved: the division of services into quality-differentiated market segments, and the pricing structure of each segment. There is evidence of diversity in user demand for service quality depending on application, familiarity, and willingness to pay. On the supply side, network technology now can support a wide range of service quality. Successful growth therefore requires service providers to offer combinations of quality and price that match user need. But to do this providers must understand the structure of user demand. Such understanding is lacking at present. This is a proposal for a market experiment to estimate the demand for network services. INDEX---the Internet Demand Experiment---has three objectives: 1. Measurement of user demand for Internet access as a function of quality of service (QoS), pricing structure, and application; 2. Demonstration of an end-to-end system that provides access to a diverse group of users at attractive price-quality combinations; 3. Development of a prototype system that can be scaled to serve the demand for remote network access from all Berkeley students, faculty and staff on a user-financed basis. The experiment will recruit 160 students, faculty and staff from the Berkeley campus community. Users will select and pay for network services from a menu of QoS-price offerings. User decisions will be monitored and the data will be used to estimate their structure of demand. The experiment will produce a unique set of data that can be analyzed to characterize individual and aggregate network traffic and to evaluate strategies for managing network resources to accommodate diverse user needs.